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The Official Monthly Record of Un ited States Foreign Policy / Volume 85 / Number 2094 



January 1985 

JA 1*B5 

7 Afghanistan W 

Department of State 


Volume 85 / Number 2094 / January 1985 


U.S. Ambassador to the 
United Nations Jeane J. 

The Department of State Bulletin, 
published by the Office of Public 
Communication in the Bureau of Public 
Affairs, is the official record of U.S. 
foreign policy. Its purpose is to provide the 
public, the Congress, and government 
agencies with information on developments 
in U.S. foreign relations and the work of 
the Department of State and the Foreign 

The Bulletin's contents include major 
addresses and news conferences of the 
President and the Secretary of State; 
statements made before congressional 
committees by the Secretary and other 
senior State Department officials; selected 
press releases issued by the White House, 
the Department, and the U.S. Mission to 
the United Nations; and treaties and other 
agreements to which the United States is 
or may become a party. Special features, 
articles, and other supportive material 
(such as maps, charts, photographs, and 
graphs) are published frequently to 
provide additional information on current 
issues but should not necessarily be 
interpreted as official U.S. policy 


Secretary of State 


Acting Assistant Secretary 
for Public Affairs 



Office of Public Communication 


Chief, Editorial Division 




Assistant Editor 

The Secretary of State has determined that the 
publication of this periodical is necessary in the 
transaction of the public business required by law of 
this Department. Use of funds for printing this 
periodical has been approved by the Director of the 
Office of Management and Budget through March 31, 

Department of State BULLETIN (ISSN 0041-7610) 
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For sale by the Superintendent of Documents, U.S. 
Government Printing Office, Washington, D.C. 



The Secretary 

Democracy and the Path to 
Economic Growth 


An Update of Constructive 

Engagement in South Africa 

(Chester A. Crocker) 
Food Assistance to Ethiopia 

(White House Statement) 
Food Assistance to Africa (White 

House Statement) 

East Asia 

U.S. -Japan Relations: Present and 
Future (Michael J. Mansfield) 




The U.S. in the World Economy: 

Myths and Realities 

(Robert J. Morris) 
Multilateral Development Banks 


1 7 Visit of the Grand Duke of 

Luxembourg (Grand Duke Jean, 
President Reagan) 

20 Reflections on East- West Rela- 
tions (Arthur F. Burns) 

23 Visit of West German Chancellor 

Kohl (Helmut Kohl, 
President Reagan) 

International Law 

24 ICJ Hears U.S. Argument 

Against Nicaraguan Claim 
(Davis R. Robinson) 

Middle East 

29 Visit of Iraqi Deputy Prime Min- 
ister (Tariq M. Aziz, 
President Reagan) 

29 Continuation of Iran Emergency 

(Letter to the Congress) 


30 Visit of Fiji Prime Minister Mara 

(Ratu Sir Kamisese Mara, 
President Reagan) 

$& ■> 


South Asia 



Assassination of India's Prime 
Minister Gandhi (President 
Reagan, Secretary Shultz) 

Afghanistan Under the Soviets: 
Five Years (Craig Karp) , 

United Nations 

45 Afghanistan: Five Years of 

Tragedy (Jeane J. Kirkpatrick, 

Text of Resolution) 
48 Africa's Economic Crisis 

(Jeane J. Kirkpatrick) 
50 International Campaign Against 

Drug Trafficking 

(Jon R. Thomas) 
53 Perspectives on the U.S. 

Withdrawal from UNESCO 

(Gregory J. Newell) 
57 Situation in Kampuchea 

(Jeane J. Kirkpatrick) 
59 Contadora: A Process for Central 

American Peace 

(Jose S. Sorzano) 
62 Freedom of the Press: The Need 

for Vigilance 

(Gregory J. Newell) 

Western Hemisphere 

65 The Resurgency of Democracy 

in Latin America 

(Secretary Shultz) 
70 Central America: Agriculture, 

Technology, and Unrest 

(Dennis T. Avery) 

End Notes 

74 November 1984 


74 Current Actions 

Press Releases 

76 Department of State 


76 Department of State 

76 Background Notes 

77 Foreign Relations Volume 


Science & Technology 



The U.S. and the Caribbean: 
Partners in Communication 
(Diana Lady Dougan) 

Commercialization of Outer Space 
(Harry R. Marshall, Jr.) 


Throughout the Caribbean and Central 
America, U.S. policy is to support the politics of 
freedom, enterprise, initiative, opportunity, and 
hope. The response we are seeing . . . suggests we 
are on the right track. 


Democracy and the Path 
to Economic Growth 

by Secretary Shultz 

Address before the eighth annual Conference on Trade, 

Investment and Development in the Caribbean Basin 

in Miami on December 6, 198J+. 1 

It's always a privilege to be introduced 
by David Rockefeller, who has done so 
much not only for the United States but 
for people throughout the world. He's 
had a 40-year association with Latin 
America and the Caribbean, so it's a 
labor of love that he is here and helping 
us, and we're all grateful to you, David, 
for your many, many contributions. 

This meeting has a good feel to it. 
Now. you can comment after you've 
been to enough meetings and tell very 
quickly whether or not the people in- 
volved are strangers to each other, or 
whether they've come to know each 
other, whether they think there's some 
good purpose to be served, and whether 
there's any sense of excitement. It's, I 
think, very apparent just to come into 
the room that there is this strong and 
good feeling here, and that is something 
that I will take great pleasure in report- 
ing back to President Reagan, who puts 
great store and importance by develop- 
ments in the Caribbean Basin area. 

There are some 600 companies here, 
and I understand that the fancy com- 
puter system that keeps track of every- 
thing says that there are at least 2,800 
appointments between company repre- 
sentatives and country representatives, 
so that is a lot of opportunity for getting 
something accomplished. Even if things 
ire not accomplished specifically at 
those meetings, they begin the process 
)f getting acquainted. So I think that 
the meeting itself has taken on, as David 
>aid, all the aspects of a kind of policy 
ind business forum for the Caribbean 

I believe freedom and economic de- 
velopment go hand in hand. This does 
lot happen automatically. But every one 
)f us in this room— government leaders 

or businessmen or -women — has an in- 
terest in making the connection and hav- 
ing it stick. This is what U.S. policy in 
Latin America and the Caribbean is all 
about. Our support for democracy com- 
plements our support for economic 
development and free markets — and 
vice versa. Together with the security 
needed for their protection, they form a 
single package of mutually reinforcing 

The reaffirmation of democracy in 
the Caribbean and its expansion in Latin 
America over the last 5 years are due 
partly to the economic failures of the 
enemies of democracy. People want 
growth. They want prosperity. When 
they don't get them, they begin to lose 
confidence in their governments and in 
the institutions that put them into 
power. The old dictators failed to make 
the grade; order loses its attractions 
when it fails to deliver either peace or 
prosperity. Meanwhile, the new totali- 
tarians in Cuba, in Nicaragua, and, until 
a year ago, in Grenada, have done even 
worse: they have spread both violence 
and the insecurities of their failures 
beyond their own borders. 

Arturo Cruz said it well in The New 
York Times this morning. "There is," he 
said, "a moral obligation to insist that 
the Sandinistas restore Nicaragua's 
liberties and that the communist world 
take its hands off our country." 

I agree, and more. Let us support a 
successful outcome of the Contadora 
process to bring about regional stability 
based on democratic principles, on a 
verifiable end to the buildup of arms and 
the subversion of democracy, and on 
economic development that is widely 
shared among the people — for democ- 
racies, too, however, are also under in- 
ternal pressure to produce. 

To sustain the democratic trend, 
governments and private sectors must 
now work together to achieve self- 
sustaining economic growth. Improving 
the ability of national economies to com- 
pete in the world market and to earn 
foreign exchange can increase the 
strength of freedom in each of our coun- 

Prospects for Growth 

What are our prospects? I would like to 
consider first the hemisphere as a whole, 
then turn to the Caribbean Basin more 

For 20 years, the developing nations 
of this hemisphere grew at extraordi- 
nary rates. Many were even beginning 
to reduce their per capita income gap 
with the industrialized world. Between 
1960 and 1980, Latin American and 
Caribbean economies grew in real terms 
by an average of more than 6% a year- 
more than double the rate of population 

Then, from 1981 to 1983, the 
region's gross domestic product (GDP) 
declined. In per capita terms, the decline 
averaged about 4% per year; 1983's de- 
cline, 5.7%, was the region's worst per- 
formance in half a century and sent 
average per capita GDP back to its 1976 
level. Though there are signs of some 
GDP growth this year, it will still be 
negative in per capita terms. 

What fueled the region's growth in 
the 1960s and 1970s, and what can we 
do to restore it? 

The primary impetus came from 
postwar liberalization and expansion of 
the world trade and financial system. 
The opening of markets in the industrial 
nations, the expansion of private inter- 
national capital flows, and vigorous two- 
way merchandise trade all provided un- 
precedented opportunities for diver- 
sification, modernization, and growth. 
For most of this period, domestic sav- 
ings provided the greater part of total 
investment; for most of this period, 
domestic savings provided the greater 
part of total investment. I didn't repeat 
that because I lost my place. It's a very 
important point. 

Foreign assistance was also import- 
ant in stimulating growth in the 1960s. 
The Inter-American Development Bank, 
created in 1959, and the Alliance for 
Progress were major sources of help. 
Official assistance accounted for 40% of 
net capital inflows to the region. 
Foreign direct investment provided 
another 40%. Commercial loans were 
not a major factor. 

lanuary 1985 


During the second half of the 1970s, 
in contrast, external private bank financ- 
ing became the major source of capital 
for development. The oil price shock of 
1973, and resultant OPEC surplus, left 
banks with cash to lend and developing 
countries with desperate needs to bor- 
row to cover the oil-import bill. And bor- 
row they did. External debt grew from 
about $75 billion in 1974 to an estimated 
$336 billion in 1983. Total debt soared 
by almost 20% per year. 

Today it is clear that external bor- 
rowing can no longer play the primary 
role. The Inter-American Development 
Bank estimates that net capital inflows 
of some $47 billion per year would be re- 
quired to sustain 5% average annual 
growth under the most realistic set of 
circumstances. And there simply aren't 
enough funds in the financial system to 
support lending of this magnitude. Even 
if there were, the level of debt service 
would be unsupportable. The region's ex- 
ternal debt would rise to about $620 
billion at the end of 1989— an increase 
of some 82%. Just to state that tells you 
it will never happen. 

What about foreign assistance? Will 
it regain the predominant role it once 
played in fostering development? 

The United States is increasing bi- 
lateral aid to the Caribbean Basin. I 
might just say, from 1980 to fiscal 1985 
the level of aid increased from around 
$324 million to $1.5 billion in economic 

We are committed to the assistance 
levels called for by the National Biparti- 
san Commission on Central America, 
and we have steadily increased aid to 
the island nations of the Caribbean. 
Other governments and international 
organizations share this interest. But 
while official assistance flows will help, 
they will not be large enough to produce 
a sustainable economic turnaround. 

In the final analysis, the private sec- 
tor is the crucial link. Only private initia- 
tive can marshal the additional re- 
sources—financial and entrepre- 
neurial—to take full advantage of the 
opportunities that the region offers. But, 
as we are all uncomfortably aware, 
private resources— domestic or 
foreign— have not been sufficiently 
forthcoming. This is the heart of the 
matter. If we agree that this great 

>urce must be tapped, then we have a 
onsibility to do what is necessary to 
make that happen. 

1 am calling here for the reversal of 
stat- • hip and anti-import policies. 

e policies have placed stifling con- 
trol! on private agriculture and industry. 

They have made them dependent on re- 
stricted markets. They have built costly 
protectionist barriers at national fron- 
tiers. And they have produced inefficient 
state enterprises that divert resources 
from more productive activities. 

I call, instead, for a development 
strategy that works through an open 
economy, one that rewards initiative, in- 
vestment, and thrift. Four key elements: 

First, growth should be based 
primarily on domestic savings and in- 
vestments. This obviously requires the , 
retention of domestic capital at home. 
I might say one of the most aston- 
ishing statistics to look at these days is 
the amount of capital that is domestic to 
a particular country that has left that 
country. And if you can just get your 
own capital back, in many cases, you can 
solve a big part of your problem. 

When people are rewarded for 
thrift, capital becomes available for in- 
vestment. When they are rewarded for 
entrepreneur ship, they respond with 
productivity and innovation. 

Second, foreign and domestic in- 
vestment should receive equally fair 
treatment. Foreign investment can bring 
more than money. It offers technology, 
training, management skills, and mar- 
keting links. And foreign investment, 
unlike foreign debt, is serviced by prof- 
its, not interest. In good times, a 
buoyant economy can afford profit re- 
mittances. In bad times, remittances fall 
or cease. But debt must be serviced in 
bad times as well as good. 

Third, foreign resources should be 
used to supplement domestic savings, 
not to supplant them. Too strong a re- 
liance on foreign assistance or foreign 
capital can foster dependence and under- 
mine productivity. 

Fourth, trade must be the engine of 
development. Domestic economies that 
are open to international competition 
can raise their national standards of 

I think that if you look at the U.S. 
economy over the past several years, 
we've had a very strong expansion, and 
we've managed to keep inflation well 
under control. One of the fundamental 
reasons for that is that our economy is 
open to international markets, and it has 
kept pricing under censure of the 
marketplace; and it has been a great 
benefit to us. 

The strategy I recommend is based 
on a simple but immensely powerful 
principle: a system that releases the pro- 
ductive force of individuals and their 
privately financed organizations— and 
rewards their industry and creativity— is 
a system that grows and prospers. 

The Caribbean Basin 

Now let me turn to the Caribbean Basin 
Initiative (CBI). It addresses these 
issues, in our immediate neighborhood, 
in a way that is both visionary and prac- 

The economies of the island nations 
of the Caribbean and those of the Cen- 
tral American isthmus have suffered 
even more pronounced ups and downs 
than the rest of the hemisphere. During 
the 1960s and 1970s, real growth in the 
Caribbean Basin was close to 7% per 
year. Then from 1981 to 1983, GDP per 
capita in the major Caribbean Basin 
countries declined by some 7% per year 
on average. There was marginally 
positive growth in the Dominican 
Republic, Panama, and Jamaica, but 
serious per capita declines in Costa Rica, 
El Salvador, Guatemala, and Honduras. 
Per capita GDP also declined in other 
countries, such as Barbados, Trinidad 
and Tobago, and Haiti. In some coun- 
tries, per capita GDP levels retreated to 
the levels of the early 1970s. 

The Caribbean Basin must also over- 
come a series of additional problems. 
First, most individual Caribbean 
Basin countries are too small to achieve 
the economies of scale. Even taken 
together, the 20 CBI-designated coun- 
tries had a combined GDP of only $46 
billion in 1982. Of course, that's what 
the Caribbean Basin Initiative is partly 
all about. It gives small economies ac- 
cess to the world's largest and most 
diversified market, thereby enabling you 
to take advantage of economies of scale. 
Second, geography creates a vicious 
economic circle: it is expensive to ship 
from the Caribbean because the cargo 
lots tend to be small. Higher transport 
costs reduce demand, keeping the cargo 
lots small. The result is that it can cost 
more to ship a cargo from Barbados to 
Miami than from Hong Kong to New 

Third, the entire area suffers from a 
serious lack of infrastructure— not only 
roads and power systems but also 
schools, hospitals, and housing. 

Competition from other suppliers is 
another key problem. The Far East and 
Mexico, for example, offer good loca- 
tions for export industries based on 
assembly operations. The United States, 
Japan, and some other Latin American 
countries all offer attractive investment 
opportunities. In other words, there is a 
very real sense in which everybody is 
competing for that investment dollar. 

Department of State Bulletin 


Societies with stagnant or shrinking 
economies are vulnerable to violent up- 
heavals. Security cooperation can help 

shield against communist adventurism. 
But there must be something there to 

When President Reagan first pro- 
posed the CB1 3 years ago, he had in 
mind more than a partnership between 
the United States and the Caribbean 
Basin to promote trade and investment. 
His was a broader vision of a peaceful 
and prosperous Caribbean in which peo- 
ple could realize their aspirations and 
build better societies for themselves and 
for their children. 

The President understood the inade- 
quacy of a short-term program— with 
this year's panacea replaced by next 
year's. That would not represent the 
practical confidence-building support 
that our neighbors need and want from 
the United States. That is why he de- 
signed the far-reaching trade provisions 
of the CBI to last for 12 years. The com- 
mitment is unprecedented in U.S. trade 
policy: one-way free trade opportunities 
will be open to CBI beneficiaries long 
enough to really make a difference. 

From the U.S. point of view, the 
CBI's underlying premise is that the 
Caribbean Basin is vital to our security 
and to our social and economic well- 
being. It is, indeed, our third border. 
Economic, social, and political events in 
the basin have a direct and significant 
impact in the United States. 

For our own self-interest, the United 
States must be a good neighbor. We 
must do all we reasonably can to help 
the countries of the Caribbean Basin 
build stable, prosperous, and decent 
democratic societies. This means we 
must all deal realistically w r ith the 
economic situation that confronts us. 

The CBI takes on the hard economic 
realities of this decade. W r hen we in 
government were consulting with our 
Caribbean neighbors and private sector 
representatives to put together this ini- 
tiative, we all agreed that investment- 
domestic and foreign— is the key to re- 
covery and continuing growth in the 

The initiative's duty-free entry into 
the U.S. market for all but a few cate- 
gories of exports from the 20 countries 
that have thus far been designated gives 
the region a competitive edge and stimu- 
lates both domestic and foreign invest- 
ment. In turn, such investment can 
generate employment and diversify the 
productive base of each beneficiary's 

In addition to duty-free trade, we 
are providing development assistance to 
help build the physical infrastructure 
and to develop the entrepreneurial and 
managerial talent needed for dynamic 
investment and trade. The United States 
is committed to substantial economic 
assistance to the region, bilaterally and 
in cooperation with international finan- 
cial institutions and other country 

The CBI recognizes that no one in 
today's world can go it alone. A genuine- 
ly multilateral effort will multiply the 
chances for success. Our common in- 
terests call for solidifying the region's 
political and economic relations with the 
world's democratic community. 

Progress Under the CBI 
To Date 

Now let me just review briefly progress 
under the CBI to date. The free trade 
provision of the initiative has been in ef- 
fect 1 1 months. That is certainly not 
long enough to judge a 12-year program. 
We should also be careful not to at- 
tribute all progress to the CBI, for much 
of the good news can be attributed to 
the strength of the U.S. economy itself. 
But several of the early indicators are 

U.S. imports from most Caribbean 
Basin countries have been growing 
rapidly. Comparing the first 8 months of 
1984 to the same period in 1983, we find 
that U.S. non-oil imports from the CBI 
countries increased by almost 34%. It's a 
big number. That is a better perform- 
ance than the average for all U.S. im- 
ports. And there are several countries 
whose exports to us experienced truly 
spectacular growth— Barbados up 78%, 
Belize up 91%, Grenada up 114%, and 
Jamaica up 83%. You may be interested 
to know that U.S. imports from Nica- 
ragua are down 47%. 

There is continued keen interest 
among potential U.S. traders and in- 
vestors in the initiative. The Overseas 
Private Investment Corporation, for ex- 
ample, has approved 43 projects in the 
area this year, and the U.S. Commerce 
Department is receiving 100 inquiries 
about the program daily. 

Investment promotion, of course, is 
primarily the responsibility of the bene- 
ficiary countries themselves. Barbados, 
for example, has generated over 2,000 
new jobs this year through joint ven- 
tures in high-tech industries. Jamaica 
has approved some 300 investment proj- 
ects during the first 2 years of its new 

investment promotion program. And the 
Dominican Republic has undertaken in- 
vestment seminars in the United States 
to promote some 30 investment profiles 
and over 100 investment studies. The 
U.S. Department of Commerce's 
regional offices helped in arranging 
these seminars and are prepared to help 
other beneficiary countries. 

I have some other good news. There 
has been concern expressed by exporters 
in the beneficiary countries that the in- 
terim customs regulations affecting 
duty-free declarations are significantly 
burdensome. I can announce today that 
these procedures have been simplified to 
meet those concerns. 

In fact, I was having lunch with 
President Reagan yesterday, and he had 
just signed whatever it is he had to sign, 
and we all — there's one thing he takes 
tremendous pleasure in, and that is 
reducing the burden of regulation. 

I mentioned previously our very sub- 
stantial economic assistance to the 
Caribbean Basin, designed to help allevi- 
ate the structural impediments to 

During President Reagan's first 
term, U.S. economic aid to the Carib- 
bean Basin nearly tripled. For fiscal 
1985, Congress approved economic as- 
sistance, as I said earlier, totaling 
almost $1.5 billion. We intend to con- 
tinue substantial development support as 
long as the need exists and the countries 
of the Caribbean Basin continue to make 
serious efforts to help themselves. 

U.S. policy is to support intra- 
regional cooperation and economic inte- 
gration to help offset the fragmentation 
of the Caribbean Basin into small 
economies and small markets. The Cen- 
tral American Common Market (CACM) 
and CARICOM [Caribbean Community 
and Common Market] in the Caribbean 
initially stimulated growth through tariff 
policies which favored import substitu- 
tion. But as the opportunities for this 
kind of expansion waned and macro- 
economic difficulties mounted, the 
framers of CARICOM and CACM began 
to think about the need for moderniza- 
tion. The members of the Central 
American Common Market, for exam- 
ple, are now considering reductions in 
their external tariff to lower the level of 
protection. This would lead to more effi- 
cient domestic industries better able to 
compete in international markets. 

We are providing bilateral assistance 
to revitalize the Central American Com- 
mon Market and to facilitate export ex- 
pansion to third countries as well as 

January 1985 


among its members. The Agency for In- 
ternational Development (AID) is pro- 
moting trade expansion by providing 
loans administered by the Caribbean 
Development Bank, to which the United 
States is the largest contributor. Other 
AID programs support trade and invest- 
ment promotion by the island govern- 

Even full regional integration, how- 
ever, would be a limited accomplishment 
if based on an inward-looking develop- 
ment strategy. No national or regional 
market is of sufficient scale for the 
rapidly changing technologies of this 
day. To be competitive, to participate in 
the world economic growth and techno- 
logical progress, countries are beginning 
to realize that they must open up to in- 
ternational competition. 

I am convinced that there is around 
the globe a large pool of money and en- 
trepreneurial talent which has been 
prevented from making its proper con- 
tribution to development by distorted 
economic policies. Only by attracting 
domestic and foreign capital, not re- 
pelling it, will governments generate 
needed economic growth. 

A good investment climate for 
domestic business will also be attractive 
to international investors. To function 
effectively, indeed to function at all, in- 
vestors—domestic and foreign— need to 
know the rules of the game. These must 
be consistent, clear, and equitable. They 
need to provide secure arrangements for 
repatriation of profits, protection of 
copyrights and patents, and a mutually 
satisfactory dispute settlement mech- 
anism. All of these would demonstrate a 
long-term commitment to private sector 

There is, however, a continued bias 
against foreign investment among some 
groups in some countries of this region. 
It exists in the United States as well. 
But I would argue that this fear of so- 
called economic imperialism has never 
been as obsolete as right now. 

Even small countries have learned 
how to control big firms. They know 
how to make the rules and how to en- 
force them. And they have the power to 
do so in ways that encourage rather 
than frighten away investors. As a 
former president of Costa Rica said 
about a contract he signed with a major 
U.S. company in 1954, "We did not try 
to kill the goose which lays the golden 
eggs, rather we saw to it that she laid 
them here in our nest." 

My point is that these kinds of geese 
ran be domesticated. The economically 
ful countries in the 1980s 
and 1990s will likely be thoi e who pro- 
bed environment for productive 

investment. Detroit and Chicago are 
learning to compete with Tokyo and 
Frankfurt. Kingston and San Salvador 
will have to do the same with regard to 
Singapore and Bangkok. 

The Role of Democracy 

Finally, let me return to my opening 
theme: the integrity of the political 
system is vital to progress. And here, 
the region has growing assets in demo- 
cratic governments that are responsive 
to the needs of their peoples and offer 
fair and equal treatment under the law. 
Strong democracies can be adept at 
addressing the problems of develop- 
ment—not weak, as some of their critics 
claim. In fact, I suggest that the worst 
way to foster growth is to have an elite 
impose even the best of notions on an 
unconsenting public. History has too 
often shown the corruption endemic in 
such systems. A democracy, accountable 
to the people through the vote, can ad- 
dress the critical issues of economic ad- 
justment and growth because it has the 
consent of the people— its legitimacy is 
derived from a public mandate. 

A year ago, Deputy Secretary Ken- 
neth Dam outlined to this same group 
our concern that we in the United States 
had been slow to appreciate the import- 
ance of defending democracy in political 
terms. He talked about the critical need 
for democratic training. And he cited 
some startling facts confirming that the 
Soviets understand their interest in 
"educating," so to speak, youth in this 
part of the world, as indicated by the 
500% increase— to nearly 4,000— in 
Soviet scholarships for area students 
from 1972 to 1982. 

Ken Dam said that we hoped that 
the new National Endowment for 
Democracy— NED, as we call it— would 
help us, in his words, "shift beyond 
short-term bailouts, beyond expensive 
public-sector agency-creation, to the con- 
certed development of men and women 
with modern economic, technical, and 
political skills." Specifically, he sug- 
gested that the Caribbean/Central 
American Action (C/CAA) "play a key 
role in catalyzing this shift and making 
it work." 

A year later, our record on this 
score is not good enough. 

The national endowment has begun 
its work. NED programs, especially 
those under the auspices of the U.S. 
Chamber of Commerce, should be of 
particular interest to this group, because 

learning how to compete is a key to suc- 
cess in the worldwide economic competi- 
tion I have described. That's just as true 
for students of economics or business 
administrators as it is for government 
officials. The chamber's new Center for 
International Private Enterprise is 
already working with many of you. 
But we are moving too slowly. 
Federal funds and programs are not 
enough. Private funding must fill the 
gap. I know that Caribbean/Central 
American Action is discussing certain 
programs with the NED. But has 
C/CAA done enough? Could you not ini- 
tiate a broader program of scholarships, 
fellowships, exchange travel, and other 
training? Is not the investment in 
people — future entrepreneurs as well as 
professors of economics and finance 
ministers— worth the effort? I think it is. 

Staying on the Path 

to Economic and Political 


Despite the many obstacles to develop- 
ment in the Caribbean Basin, consider- 
able progress has already been made. 
There are some strongly positive exter- 
nal factors— world economic recovery 
and the incentives of the Caribbean 
Basin Initiative. Even more importantly, 
I believe there is a growing realization 
that by far the most important factor 
determining growth and development is 
domestic policy— political stability com- 
bined with adequate economic incentives 
to save and invest. The tide is turning 
slowly but inexorably toward an eco- 
nomic consensus in favor of promoting 
private sector-oriented, export-led 
growth. We are on the right path. We 
must stay on it. 

The Caribbean Basin Initiative is 
thus a symbol as well as a program. It is 
a political commitment by the United 
States. It says we will play our part in 
implementing the solutions I have out- 
lined. President Reagan has just re- 
affirmed that commitment. He has 
directed appropriate Cabinet members 
and other key officials to give programs 
relating to the Caribbean Basin their 
personal attention and the institutional 
support needed for success. The Presi- 
dent emphasized that, in his words, "the 
CBI remains personally important to me 
and important to the future of our na- 

And the CBI is a commitment which 
will outlast this Administration or any 

Department of State Bulletin 


particular U.S. political situation. It 
Hows from linkages between the Carib- 
bean Basin and the United States which 
will remain and grow stronger, no mat- 
ter who is in office in anj/ of our coun- 

In the political and security fields, 
too, there has been progress. Demo- 
cratically elected governments willing to 
make genuine political and economic re- 
forms are on the upswing. Cuban and 
Soviet adventurism have been dealt 
severe blows. 

A year ago, seven governments in 
the Caribbean asked us to join in a 

tie operation in Grenada. Since then, 
the security situation and general confi- 
dence k>( the eastern Caribbean have 
much improved. The people of Grenada 
went to the polls this past Monday and 
chose a new government committed to 
democratic principles and the creation of 
a better, freer life. This is a significant 
accomplishment— of which they should 
be proud. 

In Central America, the democratic 
countries are patiently searching for 
peace while working to foil the propa- 
ganda and the subversion of homegrown 
and foreign communists. There, too, the 
general situation is slowly improving. 

Throughout the Caribbean and Cen- 
tral America, U.S. policy is to support 
the politics of freedom, enterprise, ini- 
tiative, opportunity, and hope. The re- 
sponse we are seeing — a response meas- 
ured in self-confidence expressed at the 
ballot box and in the marketplace — sug- 
gests we are on the right track. Let us 
stick to it. 

An Update of Constructive 
Engagement in South Africa 

'Press release 258 of Dec. 6, 1984. 

by Chester A. Crocker 

Statement before the Subcommittee 
on African Affairs of the Senate Foreign 
Relations Committee on September 26, 
1984. Mr. Crocker is Assistant Secretary 
for African Affairs. ' 

I appreciate this opportunity to appear 
before the subcommittee to express 
clearly and unambiguously U.S. policy 
toward South Africa, its relationship to 
our regional strategy of constructive 
engagement in southern Africa, and our 
view of recent events in that region. Let 
us be frank at the outset by recognizing 
that the development of a policy that 
adequately reflects our moral principles, 
our interests as a great power, and the 
realities of influence and power in that 
distant region is one of the thorniest 
issues in U.S. foreign policy. 

The dilemma is not that our prin- 
ciples and our interests are in conflict. 
They are not: U.S. values and interests 
can only be served to the degree that 
there is a strengthened framework of 
regional security in southern Africa and 
a sustained process of peaceful change 
in South Africa. The quest for security 
and the imperative of change are de- 
pendent on one another. The challenge 
for U.S. policy is to define in an opera- 
tional sense how we are to pursue these 
goals. This means that we must under- 
stand the extent of and limits on U.S. 
influence and then use that influence in 
a sustained and coherent manner. This 
Administration has been doing precisely 
that for the past 3V2 years. There have 
been substantial accomplishments, but a 
great deal remains to be done. Our coun- 
try can be proud of its record in defining 
an agenda of negotiated change and 
regional security in southern Africa. But 
first that record must be clearly under- 

U.S. Objectives in South Africa 

Recent events in South Africa serve to 
underscore our strong moral and 
political convictions about a system 
based on legally entrenched racism. As 
Americans, proud of our multiracial 
democracy, we are offended by dramatic 
television footage showing police action 
to contain the explosion of black anger 
in the "townships" of the Transvaal and 
by headlines about a wave of detentions 

of opponents of the new constitution and 
sweeping bans on political meetings. 
Such actions touch a sensitive nerve in 
the American body politic. They 
threaten democratic values that we 
espouse as a nation and that we believe 
must be reflected in our foreign policy. 
It was only proper that our government 
was the first to voice its concern publicly 
at these events as well as in diplomatic 

Similarly, we Americans are united 
in opposition to laws and practices in 
South Africa or anywhere else that of- 
fend basic concepts of due process and 
constitutional government. The theory 
of apartheid is rooted in the concept of 
ethnicity and ethnic separation. In prac- 
tice, apartheid translates as a system 
based on race as the organizing principle 
of politics and government. Any system 
that ascribes or denies political rights on 
this basis— including the right of citizen- 
ship itself— is bound to be termed, as 
President Reagan has said, "repugnant." 

It should be clear, then, what it is 
we are opposed to. Our goal is equally 
clear: as President Reagan stated in his 
address to the UN General Assembly 
this week, ". . . the United States con- 
siders it a moral imperative that South 
Africa's racial policies evolve peacefully 
but decisively toward a system compati- 
ble with basic norms of justice, liberty, 
and human dignity." As we have 
repeatedly stated since the outset of this 
Administration, we seek constructive 
change away from apartheid and toward 
a system based on the consent of the 

This objective, too, reflects a broad 
national consensus. Americans reject in- 
stinctively scenarios that would have us 
instigate revolutionary violence and 
racial strife in that country, with all 
their disastrous consequences in terms 
of misery and bloodshed for South 
Africans, their devastating results for 
southern Africa, and their risks of exter- 
nal intervention. No serious critic of our 
policy dares publicly to call for the 
apocalypse. Our goals— those of the 
American people— can only be reached 
through a sustained process of peaceful, 
evolutionary change. We remain op- 
posed to the resort to violence from 
whatever quarter; the fruits of political 
violence in the world today are bitter 
reminders of what terrorism and 
counterterrorism can mean. 

January 1985 


The Context for U.S. Policy 

The real issue, then, is not whether 
apartheid is good or bad but rather what 
is the best means of encouraging con- 
structive change in that country. Let us 
start by recognizing that indignation and 
strong convictions do not constitute a 
foreign policy. The issue is how to 
translate those convictions into results. 
While we have and we will speak out 
publicly to make our views known, 
public confrontation and rhetorical ex- 
changes are not the main avenue for ef- 
fective policy. The path of rhetoric and 
preaching has failed in the past, as its 
practitioners came to realize, and it is no 
more likely to be successful now. 
Ultimately, a great power will be 
measured by its results. 

Similarly, we have not relied on 
bluster, threats, or the actual implemen- 
tation of new punitive measures toward 
South Africa. All evidence suggests that 
U.S. influence for change is unlikely to 
be increased by "pinpricks" such as 
restrictions on Krugerrand sales or on 
landing rights for South African Air- 
ways. Such moves are more likely to be- 
come a show of impotence and to erode 
our influence with those we seek to per- 
suade. Our Administration remains 
totally opposed to the concept of disin- 
vestment or trade and investment sanc- 
tions more broadly. We fail to see how 
waging economic warfare against the 
Government and people of South Africa 
can advance our goals or serve the in- 
terests of either the American people or 
the citizens of all races in South Africa. 
Not only would such moves offer a fire 
sale of U.S. assets to foreign interests, 
damage our commercial credibility, and 
restrict our access to an important 
market; in some proposals at city and 
state level, they raise serious constitu- 
tional issues. More important, if 
adopted, they could sabotage desperate- 
ly needed economic opportunity for the 
black majority, remove the positive force 
for change represented by the Sullivan 
signatory companies, and produce 
disastrous consequences for those 
African states neighboring South Africa. 
Not surprisingly, an authoritative survey 
by a distinguished sociologist, Professor 
Lawrence Schlemmer, reports that 75% 
of black factory workers oppose U.S. 
disinvestment. There is an Orwellian 
perversity in proposing such measures in 
the name of liberal and humanitarian 

The starting point in this Ad- 
ministration's approach to South Africa 
and southern Africa was to recognize 
the nature of U.S. influence in a 
regional context and to identify those 
constructive things we can do to ad- 
vance our goals. We are one element in 
a complex regional equation. Our ap- 
proach is to engage ourselves positively; 
to add our weight in support of 
Americans values; to back ideas, institu- 
tions, and groups that can add to a 
dynamic for change; to propose alter- 
natives; to open doors and build 
bridges — not the reverse. 

In the South African context, much 
of our influence derives, we believe, 
from the self-image of the South African 
leadership and the white minority 
generally as part of the West as well as 
of Africa, struggling to preserve its 
identity, to maintain its security, and to 
avoid international isolation. Such at- 
titudes for much of the post- World 
War II period were accompanied by 
complacency interrupted by sudden 
shocks, as occurred with the Portuguese 
revolution; the spread of decolonization 
to Angola, Mozambique, and Zimbabwe; 
and the Soweto riots of 1976. Gradually, 
in the last decade, complacency gave 
way to a siege mentality, heightened by 
internal outbursts of black anger and 
alienation, by an increase in cross-border 
guerrilla violence, by the projection of 
Soviet/Cuban military power into the 
region, and by increasingly strident 
Western criticism of the South African 

Digging in its heels, the Afrikaner 
establishment, which has ruled the coun- 
try since 1948, developed an elaborate 
vision of itself as a regional superpower 
prepared to go it alone if necessary, to 
hang onto Namibia, and bring maximum 
pressure to bear on neighbors which are 
the hosts for guerrilla movements. The 
siege mentality included, at the time 
President Reagan took office, a deter- 
mination, above all, to maintain 
Afrikaner ethnic unity inside the Na- 
tional Party and a highly abstract com- 
mitment to domestic reform imposed 
unilaterally from above. 

A central element of U.S. policy for 
the past 3 years has been to address 
both the complacency and the siege men- 
tality I have described and to encourage 
the emergence of a more favorable 
climate for change. Repeatedly, we have 
emphasized the imperative of basic 
change while making clear that we 
recognize that such change entails a 

process, not merely a single decision. In 
our dialogue with South Africans of all 
races, we have made clear our view that 
meaningful change is an urgent matter. 
At the same time, we have stressed that 
such change can only flow from con- 
sultation and negotiation within South 
Africa and among all South Africans. 
We do not seek to impose an American 
blueprint. Recognizing that the cult of 
Afrikaner unity was hostile to serious 
reform, we moderated our public 
rhetoric in an effort to persuade the 
government there to respond to the 
realities of the South African situation 

This is not the place to recount in 
detail the sustained diplomatic efforts 
we have undertaken in southern Africa 
to reverse the escalating cycle of 
violence that risked engulfing the region 
in the early 1980s. But that effort— to 
obtain an internationally accepted settle- 
ment in Namibia on the basis of UN 
Security Council Resolution 435, to 
reduce cross-border violence in both 
directions between South Africa and its 
neighbors, and to encourage a regional 
climate of detente and the withdrawal of 
foreign forces from the area— has been 
part and parcel of our South African 
policy. Our message to the South 
Africans has been to stress the benefits 
of cooperation and negotiation within an 
agenda we have put forward to all 
governments in the region. At the same 
time, we have spelled out the costs and 
risks of failure in terms of South 
African interests and our bilateral rela- 

We believe the effort to define and 
build upon areas of common interest and 
mutual benefit throughout southern 
Africa is far preferable to simply accept- 
ing the drift toward polarization and 
violence. We strongly doubt that serious 
internal reform in South Africa is likely 
in a climate of constant fighting with 
adversaries along its borders. We know 
with assurance that U.S. regional in- 
terests and those of our allies are best 
served by a regional climate of greater 
stability, enhanced economic growth, 
and reduced openings for external in- 

The Climate for Change 

Today, 3 years later, we believe there is 
clear evidence of progress toward a 
more favorable climate for change. To- 
day, the state of relations between the 
United States and South Africa matters 

Department of State Bulletin 


very much to the South African leader- 
ship; the closeness or distance in that 
relationship depends heavily on internal 
change, evidence of momentum, and 
progress toward regional security. Our 
conscious et't'ovx to relax the siege men- 
tality no doubt played a part in enabling 
then Prime Minister (now State Presi- 
dent) P. W. Botha to take the bold deci- 
sion to put forward constitutional pro- 
posals which cost the National Party 
one-third of its core Afrikaner constitu- 

ency and gained it new white voters 
beyond Afrikaner ranks. 

Debate has raged over the question 
of South Africa's new constitution, en- 
dorsed by two-thirds of the white elec 
torate in November 1983. It is an irony 
that the turmoil of the past days and 
weeks and the repression used to sup- 
press it should have coincided with the 
introduction of a constitution which, to a 
limited extent, offers opportunities for 

wider political participation. Even this 
slight expansion of political rights to so- 
called coloreds and Asians has been seen 
by some whites as a threat and the "thin 
edge of the wedge." The fact that the 
new constitution made no provision for 
the inclusion of the 73% of the South 
African population who are black was 
bound to reinforce black bitterness. This 
Administration has been consistent in 
pointing out this fundamental flaw in 
the new constitution and our opposition 

Food Assistance to Ethiopia 

OCT. 30, 1984 1 

As you know, the President has taken a 
personal interest in the famine situation 
in Africa, particularly the current crisis 
in Ethiopia. 

Ethiopia's relief commissioner, 
Dawit Walde Giorgis, will be in 
Washington Thursday, November 1, to 
meet with U.S. officials involved in the 
emergency food supply effort, including 
General Julian Becton, Director, In- 
teragency Task Force on African 
Hunger, and U.S. Agency for Interna- 
tional Development (AID) Administrator 
M. Peter McPherson. 

The President discussed the situa- 
tion in Ethiopia with Administrator 
McPherson by telephone Friday and 
talked by telephone to Mother Teresa, 
who has requested U.S. assistance for 
projects she has undertaken there. The 
President asked Administrator McPher- 
son to call Mother Teresa and offer addi- 
tional assistance which he did. 

In December 1983, the President 
asked for a high-level interagency study 
of the worldwide hunger situation. This 
study was chaired by Ambassador 
Robert Keating, the President's envoy to 
Madagascar and Comoros. The Presi- 
dent announced on July 10 of this year a 
major initiative to respond more quickly 
and effectively to the food needs of the 
people of Africa and the world suffering 
from hunger and malnutrition. His five- 
point program, announced then, in- 

1. The prepositioning of grain in 
selected Third World areas; 

2. The creation of a special $50 
million Presidential fund to allow a more 
flexible U.S. response to severe food 

3. The financing or payment of 
ocean and inland transportation costs 

associated with U.S. food aid in special 
emergency cases; 

4. The creation of a government 
task force to provide better forecasts of 
food shortages and needs; and 

5. The establishment of an advisory 
group of business leaders to share infor- 
mation on Third World hunger and food 

In 1984 we have provided more food 
assistance to Africa than any Adminis- 
tration in U.S. history. Our drought 
assistance for all of Africa last year 
totaled $173 million, which is twice the 
amount of 1983 assistance and three 
times the amount of 1982 assistance. 
For Ethiopia alone in this fiscal year, 
since October 1, 1984, we have obligated 
$45 milion in drought assistance. This 
compares to $19 million last year to 
Ethiopia, which was the largest from 
any donor country. 

With regard to the situation in 
Ethiopia, since October 2 aid to Ethiopia 
has included: 

• $39 million for the shipment of 
80,432 metric tons of food, one-fourth of 
which will be delivered to rebel-held 
areas of Eritria and Tigray through 

• $6.3 million in response to a Red 
Cross appeal for medicines and supplies; 

• $100,000 for air transport of food 
to Makele, a central Ethiopian town cut 
off by frequent clashes along the road 
from the port. 

The pressing short-term constraint 
is the distribution of food supplies now 
in country. Limiting factors include the 
shortage of trucks, poor roads, the in- 
surgency, and the lack of support by the 
Ethiopian Government. To deal with 
some of these problems, we have in re- 

cent days been providing gasoline for 
some Ethiopian Government planes to 
move food in country and are working 
with some private groups to augment 
that effort. In our meetings with Ethio- 
pian officials this week, we will ask for 
more trucks to be made available, for 
priority access to port facilities, and for 
assurances that food can reach victims 
in rebel areas. 

For the medium term, Western food 
aid commitments will keep the pipeline 
of emergency food full to capacity. Be- 
tween now and the end of the year, ap- 
proximately 200,000 metric tons will be 
arriving. For the longer term, we are 
developing with private agencies plans 
for the distribution of an additional 
200,000 metric tons, along with 
medicines, blankets, and other supplies. 
However, assessments of the need con- 
tinue to rise, and the medium- and long- 
term requirements may increase 

Basic to this whole effort is a more 
cooperative attitude from the Ethiopian 
Government and the dedication of more 
of their own resources. They reportedly 
spent a substantial amount for their 
Independence Day celebration but have 
paid little attention to this problem. 
There are more than 6,000 trucks under 
government control for example, but 
only a few hundred are now available 
for emergency food shipments. 
However, we do sense some greater in- 
terest from them, and we hope our 
negotiations this week with them will be 

The President will continue to 
monitor our relief efforts, and he has 
asked Administrator McPherson to 
report new developments to him. 

'Text from Weekly Compilation of 
Presidential Documents of Nov. 5, 1984. 

January 1985 


to the attempt to "denationalize" blacks 
by declaring them citizens of the so- 
called homelands. 

Nevertheless, it would be premature 
to dismiss the new willingness of the 
whites to support the concept of reform 
or the potential of the new constitution 
for stimulating future change. The very 
exclusion of blacks ironically has forced 
the future political role of blacks on top 
of the public agenda. State President 
Botha indicated as much in his inaugural 
address. The departure from "whites 
only" politics may well prove to have a 
substantial effect on those who govern 
South Africa. The very fact that par- 
ticipation in the "colored" and Asian 
elections was so low will add further im- 
petus to existing pressure on newly 
elected members of the "colored" and 
Asian chambers to fight for change. We 
believe the debate over whether this 
new constitution represents a step for- 
ward can only be resolved by future 
historians. For our part, we believe that, 
whatever the intentions of its authors, it 
is an irreversible step. Its effect— pre- 
cisely because of widespread boycotts- 
will be to accelerate the reappraisal of 
future options among whites and to fur- 
ther erode complacency. 

We remain confident that there is a 
new dynamic at work in South Africa, 
driven by socioeconomic and political re- 
quirements. This is by no means con- 
tradicted by the unrest and rioting of 
the past weeks. As Alexis de Tocqueville 
pointed out, this is a phenomenon that 
historically tends to occur precisely 
when rigid old patterns are begining to 
break up. We are urging the South 
African Government to recognize that 
repression provides no lasting answer to 
this problem. We hope that the govern- 
ment will recognize that it is in its own 
interest to release those recently de- 
tained quickly or, at the very least, to 
charge those it has decided to put on 
trial without delay so that they have a 
chance to defend themselves in a court 
of law. We have taken note that State 
President Botha himself, in his inaugural 
address, has stressed that the new 

tern requires dialogue not only among 
whites, "coloreds," and Asians but also 
with blacks. The burden now is on the 

■ rnment to recognize and invite valid 
black interlocutors to the table. This is a 
process we encourage, even if we have 
no dired role in it and do not presume 
to come up with prescriptive formulas. 

A second feature of our efforts to 
back change is our quiet diplomacy on 
behalf of specific improvements and con- 
crete problems of human and civil 
rights. By definition, one cannot discuss 
publicly the content of specific efforts. 
Nonetheless, while we recognize that the 
major impetus for change must come 
from within South Africa itself, we have 
actively concerned ourselves on several 
fronts to seek concrete improvements: 
our interest in such issues as detentions 
and bannings (until recently, dramatical- 
ly reduced), urban residency rights for 
blacks, forced removals of settled black 
communities, and the issuance of travel 
documents and visas have been widely 
recognized in South Africa's human 
rights community— in sharp contrast to 
the distant critics who may afford the 
luxury of dismissing such matters as 
"mere amelioration" of the current 
system. We will remain engaged in such 

endeavors, as we are certain the Con- 
gress and the American people would 
wish us to be. 

A third element of our approach has 
been to provide concrete, tangible sup- 
port of those groups, institutions, and 
processes which are essential to change 
in South Africa. Through deepened con- 
tact with those who are on apartheid's 
receiving end and who seek the tools to 
promote peaceful black advancement, we 
have defined a series of assistance pro- 
grams of which Americans can be proud. 
I would like to emphasize as well that 
we have done so in close cooperation 
with the Congress, which has taken im- 
portant initiatives to expand our efforts 
and establish new programs to assist 
apartheid's victims. 

The Congress, most recently in 
response to your lead, Madame Chair- 
man [Senator Kassebaum], and that of 

Food Assistance to Africa 

NOV. 1, 1984 1 

President Reagan today approved fur- 
ther measures the United States is tak- 
ing in response to the growing food 
emergency in Africa. 

The President approved food 
assistance to three more African coun- 
tries: Kenya, 120,000 metric tons of 
food, valued at $25.5 million; Mozam- 
bique, 73,000 metric tons, valued at 
$12.7 million; Mali, 15,000 metric tons, 
valued at $6.9 million. 

These new approvals total 208,000 
metric tons valued at $45.1 million. This 
brings the total drought-related food 
assistance obligated to Africa in fiscal 
year 1985 (since October 1, 1984) to 
$131 million for 15 African countries. 
Niger and Chad are also under active 
consideration for food assistance. 

M. Peter McPherson, Administrator 
of the Agency for International Develop- 
ment (AID), will meet with Ethiopian 
Commissioner Dawit Walde Giorgis, 
Director, Ethiopian Relief Agency, today 
and tomorrow in Washington to discuss 
efforts of the Ethiopian and U.S. 
Governments to deal with the drought in 
that country. Subject to discussions with 
the Ethiopian Government, the Presi- 
dent has authorized AID to contract 

with TransAmerica, a U.S. based airline, 
for two L-100 cargo planes to airlift 
emergency food supplies to drought vic- 
tims within Ethiopia. The planes can ar- 
rive in Ethiopia on November 4th and 
5th and remain for at least 60 days at a 
cost of approximately $2.4 million. 

In fiscal year 1984, the United 
States provided more than 500,000 
metric tons of emergency food to more 
than 25 African countries. The value of 
the food exceeded $173 million for fiscal 
year 1984. 

The President is committed to ad- 
dressing the drought emergency on an 
Africa-wide basis. In Ethiopia, the prob- 
lem has largely been on the Ethiopian 
side, reflected in an inability or unwill- 
ingness to get the goods to the people in 
need. There are some signs of improve- 
ment now. 

We note that the Soviet Union has 
announced that it will provide some 
limited transportation assistance to help 
deliver food in Ethiopia. We hope this 
means a basic change in Soviet policy. 
Their record has been one of overwhelm- 
ingly military-oriented programs in the 
Third World, with little assistance in 
terms of aid and development. 

•Text from Weekly Compilation of 
Presidential Documents of Nov. 5, 1984. 

Department of State Bulletin 



y>ur colleague, Senator Percy, has vital- 
ly contributed to enhanced opportunity 
for black South Africans. The humani- 
tarian development monies under legisla- 
tion which you sponsored this year have 
gone to assist 60 projects with a total of 

10,000. These projects range from 
assistance to education in particularly 
deprived areas to the provision of law 
libraries to legal centers in urban areas, 
which assist blacks to understand their 
options under the law. Building from 
suggestions of Congressman Solarz dur- 
ing the previous Administration, we 
have gone forward to help educate black 
South Africans in a program that is a 
model of cooperation between the 
government and private sectors. A total 
of about $7.5 million, over half from the 
Federal Government, has brought about 
350 black South Africans to the United 
States for advanced study. At this point 
about 50 have returned to use their 
skills in South Africa. 

We are currently seeking to expand 
educational assistance by instituting a 
program of scholarship support for 
university-level study within South 
Africa. If current obstacles can be over- 
come in consultation with Congress, we 
should be able to put 70 young people 
into a 5-year university at a cost of $3 
million. Nearly $6 million has been com- 
mitted in support of programs of im- 
proving basic black educational skills, 
entreprenurial training, and the training 
and support of black trade unionists. 
The Ambassador's self-help fund been 
particularly effective in supporting 

small-scale projects at the community 
level— some 37 projects costing $275,000 
this year. In another area we have 
funded some $500,000 of drought relief 
assistance via nongovernmental 
groups— half in the form of 3-to-l 
matching grants— while stressing that 
South Africans themselves should carry 
the bulk of this responsibility. 

These efforts lack drama, but they 
are the necessary building blocks of a 
constructive approach to change. When 
viewed in conjunction with the far larger 
efforts of Sullivan signatory companies 
and a host of U.S. -based foundations, 
universities, unions, and other 
nongovernmental organizations, they 
make clear what we stand for in South 
Africa. More could be done, and we 
stand ready to work with Congress in 
defining additional areas of constructive 
activity. Black South Africans who seek 
to improve their quality and standard of 
life, their bargaining power, their access 
to equal opportunity, and their capacity 
to participate as equals in all aspects of 
South African life are eager for support 
in^a wide range of fields. These include 
health care, fair employment practices 
and labor relations, education, legal 
services, and housing. While the issue of 
political rights remains of paramount im- 
portance, these areas of expanded op- 
portunity are also high on the list of 
black priorities. We will not ignore 

Regional Conclusion 

Finally, I would be remiss in not saying 
a brief word about our regional efforts 
and accomplishments in southern Africa. 
Today, after 3 years of active diplomacy 
with all regional states concerned and 
our allies, we are closer to the threshold 
of Namibian independence than ever 
before. The underbrush has been cleared 
away. Though negotiations are at a sen- 
sitive stage, we have reason to believe 
we may be close to the fundamental 
political decisions on implementing 
Resolution 435 and an agreement on the 
Cuban troop issue in Angola. We have 
identified the basis for a settlement and 
are committed to succeed. On a broader 
regional basis, the level of cross-border 
violence in southern Africa is sharply 
reduced. Despite fundamental political 
differences, neighbors are increasingly 
sensitive to the responsibilities of coex- 
istence. Contact and communication are 
on the increase. 

The U.S. role is one of a catalyst. 
Where that role is welcomed by both 
sides, we will play it. Let me make it 
clear, however, that we are not party to 
any effort to impose a standard formula 
on relations between South Africa and 
its neighbors. Each relationship is 
distinct and stands on its own merits. 
The dramatic example of Mozambique 
and South Africa concluding a formal 
political agreement met the needs of 
those two parties. Coexistence can take 
many forms. What we do support, 
however, is a regional climate of 
dialogue that gives negotiation and 
peaceful change a chance. We can be 
proud that the doctrines of guerrilla 
violence and the garrison state have 
been set aside— at least for now— as the 
parties explore other roads. We wish 
them all well. 

a The complete transcript of the hearings 
will be published by the committee and will 
be available from the Superintendent of 
Documents, U.S. Government Printing Of- 
fice, Washington, D.C. 20402. ■ 

January 1985 


U.S.-Japan Relations: 
Present and Future 

by Michael J. Mansfield 

The following address before the 
Research Institute of Japan in Tokyo on 
October 29, 198A, is reprinted from 
Business America of November 12, 1984. 1 

Mr. Mansfield is U.S. Ambassador 
to Japan. 

As I was preparing for this speech, I 
found myself drawn to a Waka poem 
composed by the Empress Shoken. It is 
called "Listening," and it goes like this: 
"Other people's words, sometimes good 
and sometimes bad, need to be heeded; 
if we listen carefully we can benefit 

I have done both a lot of listening 
and a lot of talking during my life, and I 
hope that the views we exchange today 
might be of some benefit for all of us. 

I have come to talk to you about one 
of my favorite subjects: the U.S.-Japan 
relationship. My 7 years of service as 
Ambassador to Japan have solidified my 
belief— indeed my credo— that the 
Japanese- American relationship is the 
most important bilateral relationship in 
the world, bar none. It has been nur- 
tured and carefully tended for more 
than 35 years and is now a full-fledged 
partnership. Indeed, the U.S.-Japan 
relationship— its stability, reliability, and 
durability — will be a decisive factor in 
determining the future of much of the 

It hasn't always been this way. 

We began as two disparate people 
on opposite sides of a vast ocean, prod- 
ucts of very different histories, speaking 
very different languages. The decade of 
the forties found us engaged in a tragic 


However, a commonality of interests 
brought us back together in the produc- 
tive partnership we share today. And 
while our cultures remain distinct, and 
our languages are different, we have 
made real progress in overcoming the 
physical and mental barriers of distance. 

This is significant for the Japanese- 
American partnership. For our 
Japanese-American partnership is a liv- 
ing relationship, and as such, it must 
change and adapt as each partner 
matures and is called upon to accept 
new responsibilities. Prime Minister 
[Yasuhiro] Nakasone has helped us all to 
realize that equality now prevails be- 
tween our two nations— equality in 
responsibilities, sacrifices, and yes, 
equality in the benefits that come from 
working together. 

Now, by almost any objective meas- 
ure—political, economic, or cultural, to 
name just three— what Japan and the 
United States do alone and together is 
of tremendous importance to our two 
countries and to the entire world. And 
what keeps us working in harmony is 
that— unlike other bilateral relationships 
which, though important, are sometimes 
based on adversarial assocations— Japan 

The U.S.-Japan relationship . . . will be a decisive 
factor in determining the future of much of the 

As some of you may know, my in- 
terest and fascination with Asia— par- 
ticularly with Japan— began back in 
L922, when a Bhip 1 was serving on as a 
Marine docked in Nagasaki for a few 

to take on coal. So it. has been over 
the pasl sue decades that I have wit- 

olution of U.S.-Japan ties. 

and the United States are allies who 
have many common goals and objec- 
tives. This further reinforces the bonds 
uniting us. 

We must not allow these bonds to 
become frayed or tangled because of 
friction or misunderstandings. Instead, 
we must ensure that our relationship 
will always be a productive and 

cooperative one, based on mutual trust, 
equality, and shared goals. 

To that end, Prime Minister 
Nakasone and President Reagan an- 
nounced their intention, during the 
Prime Minister's visit to Washington in 
January 1983, of appointing a small 
group of private citizens of both coun- 
tries, representing major sectors of 
society, to advise the two governments 
on the conduct of U.S.-Japan relations. 
Thus the U.S.-Japan Advisory Commis- 
sion came into being on May 12, 1983, in 
accordance with arrangements worked 
out by the Secretary of State and the 
Foreign Minister. 

The distinguished commission was 
charged with the task of making recom- 
mendations on all aspects of U.S.-Japan 
relations— in both the short and the 
long-term. David Packard, Chairman of 
Hewlett-Packard, Inc., and Ambassador 
Nobuhiko Ushiba, former State Minister 
for External Economic Affairs, served 
as co-chairmen. 

To quote from the introduction to 
the commission's report, "The future 
success of the U.S.-Japan relationship is 
of great significance to world peace and 
prosperity, especially to that of the 
Pacific Basin region. The commission 
believes that if Japan and the United 
States can manage their relations well, 
and build even stronger bonds of 
cooperation, they have the capability to 
lead the Pacific region into a new era of 
progress and lasting peace." 

I would like to discuss some of the 
recommendations that this U.S.-Japan 
Advisory Commission made in a report 
submitted to President Reagan and 
Prime Minister Nakasone on Sept. 17. 
In broad terms, the report calls for 
both countries to ensure that the private 
sector participates adequately in the 
policymaking process. It also suggests 
improved mechanisms— especially in 
Japan— to ensure that market access 
commitments are effectively carried out. 
Japan and the United States are 
counseled to promote a new GATT 
[General Agreement on Tariffs and 
Trade] round in order to deal with trade 
issues multilaterally. The report also 
urges the United States to provide new 
emphasis and high-level guidance to the 
management of policy toward Japan. 


Department of State Bulletin 


Perhaps most significantly, the 
report recommends Japan establish its 
own "Special Commission on Japan's 

nda for Strengthening the Interna- 
tiona] Economy. " This special commis- 
sion would develop Japan's agenda for 
external and internal priority tasks, so 
that Japan can take the initiative in 
problem-solving, rather than waiting for 
the problems to come home and roost. 

We are most pleased that, following 
the September 25 Cabinet meeting, 
Prime Minister Xakasone instructed 
Japanese ministries to study the ways to 
best implement the commission's recom- 
mendations, particularly those in the 
economic and trade areas. 

Let me assure you that the United 
States is also taking the commission's 
recommendations very seriously. We 
have a deep concern for many of the 
issues discussed in the panel's findings. 
We are concerned that the U.S. -Japan 
relationship be better managed; that the 
outstanding issues before us be solved at 
the working levels of our governments, 
before they inject themselves into 
political debates. A corollary to this is 
the unfortunate tendency for 
bureaucratic and political attention to be 
focused on questions that should be 
routinely resolved through ad- 
ministrative mechanisms. It does neither 
country any good for specific prob- 
lems — such as beef and oranges — to be 
turned into partisan rallying cries, when 
the real issue is market access. 

On the other hand, as the report 
points out, it does neither country any 
good to stress that foreign competition 
is a cause rather than a symptom of 
such problems as lower productivity 
growth, insufficient attention to long- 
term market share, or management 
mistakes. We Americans are coming to 
the realization that we will not solve our 
own economic problems by looking only 
beyond our borders for the source of our 
ills. Raising walls of protectionism to 
hide behind will not improve our situa- 
tion. It will only make it worse. 

While Japan can certainly help by 
enabling Americans and others to have 
greater access to its markets, American 
hard work, increased productivity, 
respect for quality, competitive pricing, 
and follow-through service will be essen- 
tial, if we are to be a competitive 
trading partner. 

Certainly we would like to see Japan 
complete the process of opening up its 
markets. We believe that we could sell 
more manufactured goods and 

agricultural products here, were we 
given the access we seek. 

In this regard, we would hope Japan 
adopts the Advisory Commission's sug- 
gestion that improved market access be 
made a national goal for Japan, based 
on the premise that trade should be 
free — unless a compelling argument ex- 
ists for restrictions. To match this, the 
United States should adopt a more 
positive export strategy to take advan- 
tage of these new opportunities. 

Stability on the Korean peninsula 
will also remain vital to both Japan and 
the United States. The United States 
heartily welcomed Prime Minister 
Nakasone's visit to the Republic of 
Korea and President Chun Doo Hwan's 
visit to Japan as symbols of the efforts 
being made on both sides to create an 
atmosphere of mutual trust and 
understanding in their relations. 

Japan and the United States are of 
course tied together by the Treaty of 

We would like to see Japan complete the process of 
opening up its markets. 

In order to keep our relationships 
healthy, both governments, as suggested 
by the commission, should take steps to 
address both our bilateral trade im- 
balance and our imbalances vis-a-vis the 
world. The United States should reduce 
its budget deficit in order to help bring 
down the high value of the dollar, which 
is hurting U.S. exports worldwide. 
Japan, for its part, can help stimulate 
world economic recovery by increasing 
its own growth in non-export sectors 
and reducing its continued high trade 
and current-account surpluses. 

Furthermore, the Advisory Group's 
recommendation that Japan establish a 
"Special Commission on Japan's Agenda 
for Strengthening the International 
Economy" is worth particular attention. 
For example, such a commission could 
examine ways for Japan to share its 
capital and technology with countries 
overseas. In this way, Japan could 
demonstrate initiative, instead of being 
in the position of simply reacting to 
foreign pressures, as it is so often ac- 
cused of doing. Japan would assume a 
role more commensurate with its status 
as the world's second largest economic 

In regard to diplomatic and security 
affairs, Japan and the United States 
have similar international interests, as 
the Advisory Commission has pointed 
out. We must continue to consult closely 
on trade, credits, technology transfer, 
and resource development in the Asian 
region, keeping in mind that the poten- 
tial adversary we face is well-armed. At 
the same time, the United States and 
Japan seek constructive dialogue, believ- 
ing that equitable, verifiable arms con- 
trol on a global basis would contribute to 
world stability and peace. 

Mutual Security and Cooperation. Under 
this agreemement, the United States has 
pledged to come to Japan's aid in case of 
attack — and we will. Japan in turn of- 
fers us the use of various facilities to 
fulfill our obligations here and 
throughout Asia. Japan also provides 
more than one billion dollars in host 
country support for the upkeep of those 
facilities, where today we deploy approx- 
imately 60,000 troops. 

Certainly we appreciate your doing 
more in your own self-defense. The 
United States, in order to honor its com- 
mitments as an ally and friend in the 
Asia-Pacific region, has to spread its 
resources over a vast area, making it 
difficult to meet the challenge of the 
growing power and range of our adver- 
saries. The more Japan can do in its 
own defense, the more we can use our 
resources efficiently in this region and 

Americans should remember that 
Japan has, for the past 13 years, made 
steady and significant progress in its ef- 
fort to increase its defense capability. 
And it is Japan's generous financial and 
political support for the U.S. forces here 
that has made it possible for us to 
rebuild a strong and stable presence in 
Asia — which our Asian community of 
friends feel is the bulwark of their 

I believe the U.S. -Japanese defense 
relationship has become qualitatively dif- 
ferent for both nations in the past few 
years. We have reached a new kind of 
defense partnership in which both sides 
are working together to define and 

January 1985 



carry out a division of labor— not only 
to ensure the security of Japan, but to 
maximize the contribution that 
U.S.-Japan defense cooperation makes 
to the deterrent power of the Western 
alliance as a whole. 

But in a security relationship of our 
breadth and magnitude, there are 
always problems. Living in Japan as 
long as I have, I am very aware of the 
inconveniences and sacrifices that 
Japanese people suffer in hosting our 
bases in such a heavily populated area. 
Believe me, it makes us appreciate all 
the more the warm hospitality and sup- 
port we enjoy in Japan. 

Many of you are familiar with 
government-funded exchange programs 
such as the Fulbright Scholarships and 
America's International Visitor Pro- 
gram. But the responsibility for ex- 
changes of course goes beyond govern- 
ments. Private organizations also con- 
tribute to mutual understanding. The 
U.S.-Japan Advisory Commission Report 
specifically cited such positive 
developments as: 

• The creation of the Japanese 
counterpart to the U.S. Association of 
Japan-American Societies for program- 
ing at local levels; 

The development of the Pacific Basin during the 
next 100 years will make a turning point in world 

Let me also touch a bit upon the 
roles cultural and academic exchanges 
play in our bilateral relationships. For as 
much as I have spoken about trade and 
defense— the "flesh and bone" of our 
partnership— I have not forgotten for a 
moment that the heart of our relation- 
ship has always been and will continue 
to revolve around people. And people 
are what these cultural and academic ex- 
changes are all about . . . whether we 
are talking about exchanges of 
parliamentarians, labor leaders, jour- 
nalists, performers and artists, teachers, 
students, lawyers, researchers, etc. 

There's an old saying in the United 
States that "ignorance is bliss." In other 
words, if you don't know about 
something it can't hurt you, can't bother 
you. I don't believe that for a minute. 
Some of the great benefits of our know- 
ing each other will come from the shar- 
ing, the understanding, the cooperation, 
and the friendships that develop among 
us. And one of the major goals of 
cultural and academic exchanges is to 
create a public climate where the "flesh 
and bones" problems can be solved in a 
spirit of cordiality and mutual 

• The extraordinary effort of 
Japanese Fulbright alumni to raise funds 
to enhance the Fulbright Program; 

• The efforts in some U.S. states to 
strengthen Japan-oriented studies, in- 
cluding school outreach programs; 

• Increased sister cities activities; 

• The proposed establishment of an 
American House in Tokyo, as a center 
for nonprofit organizations involved in 
activities related to U.S.-Japan relations, 
similar to the Japan House in New 

A better understanding of each 
other's people and culture— which can 
be translated into accurate perceptions 
of our governments and policies— will 
serve us in good stead now as well as in 
the future. 

The media can also be an important 
force for growing awareness among 
both our people. Coverage of Japanese- 
American affairs has increased and im- 
proved during recent years. Japanese 
correspondents in the United States now 
number about 125, while American cor- 
respondents here number over 100. 
Stories, commentaries, in-depth ar- 
ticles— I welcome them all, because they 
provide the necessary food for thought 
about Japan-U.S. relations. 

Before I close these remarks, let me 
turn briefly to another subject that is as 
dear to my heart as the U.S.-Japan rela- 
tionship. That is the future of the Pacific 
Basin, the coming "Century of the 

The development of this basin dur- 
ing the next 100 years will mark a turn- 
ing point in world history. More than 
half the people of the world live in this 
area. Four South American nations 
front on the Pacific, as do all of Central 
and North America, East Asia, 
Australia, New Zealand, and the islands 
in between. When you think of the 
Pacific Basin, with its tremendous 
natural resources (the most important 
being the people of that region), the 
mostly friendly governments, the cur- 
rent trade volume, the great potential 
markets— when you consider the 
demographic trends, the movements of 
population to the south and especially 
the west in my own country, you cannot 
help but come to the conclusion that a 
pattern is developing— the intersection 
of trade and peoples in that basin. 

To quote Giovanni Agnelli, Chair- 
man of Fiat, in December 1983: "Modern 
America is going toward the Pacific and 
the European side of America is losing 

To quote President Reagan on his 
November 1983 state visit to Japan: 
"You cannot help but feel that the great 
Pacific Basin— with all its nations and 
all its potential for growth and 
development— that is the future." 

And to conclude with Secretary of 
State George Shultz in Honolulu in July 
of this year: "The Pacific and the future 
are inseparable." 

I have seen a lot happen in six 
decades. You will see a lot more in the 
decades ahead. And the world will see 
the Pacific Basin mature and come of 

Embassador Mansfield's introductory 
remarks omitted here. ■ 


Department of State Bulletin 


The U.S. in the World Economy: 
Myths and Realities 

by Robert J. Morris 

Aii'i • ■■< the Long Beach Inter- 

national Business Association in Long 

- . California, on November 16, 198 J*. 
Mr. Morris is Deputy to the Under 
'•in/ for Economic Affairs. 

For at least the last 2 years, U.S. 
policies and/or performance have been 
the target of fairly shrill foreign 
criticism. Five main themes are 

• Large U.S. budget deficits, 
especially when corrected for cyclical 
factors, have been directly and over- 
whelmingly responsible for high real in- 
terest rates. 

• High rates are sucking in capital 
from abroad to finance the U.S. budget 
deficit, thus forcing foreign rates up, 
prolonging foreign stagflation, and/or 
threatening to choke off recovery 
(depending on the phase of the cycle the 
complainer is in). 

• Capital inflow and the counterpart 
record U.S. trade deficit are unsus- 
tainable; they have produced an over- 
valued dollar, destabilized foreign ex- 
change markets, and threaten a roller- 
coaster fall when the market turns. 

• High U.S. interest rates and the 
appreciating dollar have severely exacer- 
bated the international debt problem. 

• The strong dollar has strength- 
ened the forces of protectionism in the 
United States, directed mainly against 
developing countries and especially those 
which need foreign exchange to service 
their debts. 

Evaluating the Validity of 
Foreign Criticisms 

Of all these complaints, only the last two 
have more than a rather superficially ap- 
pealing validity. That fact alone should 
begin to suggest where we ought to be 
concentrating our efforts, both to sus- 
tain the recovery begun 2 years ago and 
to assure that the international economy 
is able to come through the severe 
decompression adjustment of the early 
1980s with minimum disruption— 
however, more of that* later. First, let's 

look more carefully at the other 
criticisms to see just how valid they may 
be and what should be done about them. 

Budget Deficits and Interest 
Rates. Budget deficits are bad for 
several reasons, but the notion they are 
the predominant cause of high interest 
rates is not one of them. 

Surely they contribute marginally to 
upward pressure on interest rates. 
However, the strength of demand for 
credit resulting from our vigorous 
recovery and especially the strength of 
demand for capital equipment, which has 
characterized this recovery, are at least 
as important and probably more so. A 
third factor is some continuing skep- 
ticism in the market about the per- 
manence of the low inflation we have 
been experiencing. Consider two points. 

• Most of the focus of this debate is 
on the Federal Government deficit. But 
the more relevant measure would be the 
total government deficit, taking account 
of the large surpluses generated by most 
state and local authorities in this coun- 
try—surpluses which have been running 
recently at close to one-third of the 
Federal deficit. Thus, the figure for 
calculating the impact on credit markets 
was probably closer to $100 billion last 
year than the $200 billion usually cited. 

• The effect of the 1981 tax act was 
to raise the after-tax real rate of return 
on business investment. Historically, 
there is a close correlation between that 
rate and real interest rates. If the 
former rises, the latter must also in 
order to remain competitive as a use of 

As growth begins to moderate, as 
demand for new capital investment 
reaches a plateau, and as inflation stays 
reassuringly low, we should begin to see 
a decline in interest rates. Indeed, there 
are clear signs of that already- 
unrelated to developments in the 
Federal deficit, one might add. 

There appear to be at least four 
main reasons why interest rates have 
been falling over recent weeks. 

First, the greater-than-expected 
slowdown in economic growth — drop- 
ping from 7% at an annual rate in the 

second quarter to an estimated 2.7% in 
the third— has reduced private credit 

Second, the deceleration in the rate 
of money growth— with Ml dropping to 
the lower end of its target range during 
the third quarter— coupled with the 
slowing in the rate of economic expan- 
sion have allayed fears about renewed 
inflationary pressure. 

Third, the substantial decline over 
the last several weeks in the Federal 
funds rate has encouraged the view that 
the Federal Reserve Board has eased its 
policy stance in order to encourage addi- 
tional money growth— growth for which 
there is adequate scope within its target 
range without stimulating concern that 
early tightening would be required. 

Fourth, market perceptions of a risk 
of default associated with banking sector 
instability— often signaled by the spread 
between the rates for 90-day certificates 
of deposit and Treasury bills— have 
abated, with the spread falling by over 
100 basis points between July and late 

In summary, interest rates are 
responding to market forces and Federal 
Reserve actions on the money supply, as 
they always have and will in the future. 
The budget deficit will play little role in 
this equation. 

Foreign Effects of High U.S. In- 
terest Rates. Second complaint: are 
U.S. interest rates the main reason for 
the large and growing U.S. surplus on 
capital account (a more accurate descrip- 
tion than large capital inflow)? 

Here, too, the answer must be no. 
Granted some foreign capital has moved 
into the United States attracted by high 
U.S. rates. However, there are at least 
three other reasons which are equally 

• Since the recession trough of 
mid-1982, the recovery has been much 
more vigorous in the United States than 
in any of its partners. Capital has flowed 
into dollars to take advantage of the 
higher rate of return on dollar assets 
generally, be they debt instruments, 
equities, real plant, or property. 

• Economic uncertainties, especially 
in the high-debt LDCs [less developed 
countries] and political instabilities in 
various parts of the world over the last 

January 1985 



few years have prompted substantial 
capital flight into dollars— hardly the 
fault of the United States. 

• Finally, the sharp reduction last 
year in U.S. capital outflows, and 
especially the contraction in net new 
lending by commercial banks to the 
debtor countries, accounted by itself for 
essentially all of the rise in the capital 
surplus over the previous year. 

Incidentally, the charge that foreign 
capital is financing the U.S. budget 
deficit is not sustained by the facts 
either. Though there was a threefold in- 
crease in foreign purchases of Treasury 
securities in 1983 over the previous 
year, that still amounted to less than 
10% of the total Federal deficit. Net 
foreign investment in the United States 
last year was over $40 billion, most of 
which was in the private sector. Ameri- 
cans, not foreigners, are financing the 
U.S. Government deficit. 

Dollar Strength and Trade 
Deficits. The third complaint— that 
heavy capital inflows are forcing the 
dollar to rise in value and produce an 
unsustainably large trade deficit— is one 
voiced by both foreign and domestic 
critics. It is essentially correct. 
However, it is also used by both to 
argue in favor of more intervention on 
foreign exchange markets or, at least, to 
bring our budget under control (again, 
reflecting the conviction that our budget 
deficit is the prime cause of capital in- 
flow and, by extension, the strong 

Regardless of the reasons why 
capital is flowing toward the dollar, one 
has to ask how effective currency in- 
tervention would be in countering that 
movement (and thus changing the value 
of the dollar). My own conclusion is not 
very, if at all. Until changes occur in the 
conditions which gave rise to the flows 
into dollars— more rapid U.S. recovery, 
lower taxes on investment, capital flight 
away from other countries— there is 
nothing that intervention can do to 
change the situation. Nor are these fac- 
tors likely to change so radically in the 
medium-term future that we risk a 
massive retreat away from the dollar. 
Though we can expect some decline in 
the dollar as recovery picks up abroad 
and continues to moderate in the United 
States, the likelihood of a run on the 
dollar, as long as anti-inflationary 
monetary policies are maintained, is not 
very great. 

Protectionism and the Interna- 
tional Debt Problem. The fourth and 
fifth complaints— that the strong dollar 
has aggravated the debt problem and 
stimulated protectionist pressure in the 
United States— have rather more validi- 
ty than the first three. 

The strong dollar has effectively 
meant that the real resources which 
were bought with the weaker dollars 
borrowed in the late 1970s now must be 
repaid at levels increased not only by 
higher rates of interest but by a 
stronger dollar than prevailed then. 
While this is a real problem, it should 
not be exaggerated. The strong dollar 
and high interest rates result essentially 
from the strong U.S. recovery. This 
recovery has in turn produced the 
record U.S. trade deficits which are the 
counterpart of our large capital surplus. 
Those deficits are providing increased 
export earnings for the debtor countries, 
with which they can service their debts. 
In fact, the reduction in LDC current ac- 
count deficits last year was due almost 
entirely to the shift into surplus in their 
trade with the United States. 

There is, however, a second ques- 
tion: has the trade deficit and strong 
dollar been damaging to the United 
States? The answer depends a lot on 
your personal perspective. 

• If you are competing with imports 
or are an exporter, you see the strong 
dollar as a threat. 

• If you are a consumer, a worker 
in an industry not affected much by 
foreign trade, or a pensioner living on a 
fixed income, you reap an advantage in 
the form of lower inflation and a higher 
real standard of living. 

On balance, the strong dollar has 
been more beneficial than harmful to us 
by increasing our buying power, helping 
to dampen inflationary pressures, and 
promoting some competitive adjustment 
in U.S. export and import-competing in- 

The one major disadvantage of the 
strong dollar— and where the foreign 
complaints are, indeed, well taken— is 
the impetus it gives to protectionist 
forces in the United States. More on 
that later. 

Our Future Tasks 

It is instructive, if not edifying, to com- 
pare these criticisms of U.S. perform- 
ance today with what these same critics 
were asking U.S. policymakers to do 

during most of the 1970s. Then the cry 
was for the United States to take the 
lead in pulling the world out of the 
recession of the mid-1970s. We were 
urged to fulfill our responsibilities as the 
"locomotive" of the world economy. As 
the 1970s wore on, U.S. monetary 
policies generated new inflationary 
pressures in our economy and a severely 
depreciating dollar abroad, which our 
foreign friends urged us to bring under 
control. Today, we have experienced 2 
years of high growth, low inflation, and 
a strong dollar. That strong dollar, 
vigorous growth, large trade deficits, 
and capital imports are the consequences 
of what the Europeans, in particular, 
were urging on us before. 

Critics of our policies and perform- 
ance cannot have it both ways. They 
cannot have rapid U.S. growth and, at 
the same time, low interest rates; or 
high growth and low U.S. trade deficits. 
They cannot have the impetus which our 
trade deficits give to their own growth 
without the capital flowing toward the 
United States to finance those deficits. 
Finally, they cannot reasonably expect 
the dollar to come down until conditions 
abroad change and the reasons giving 
rise to capital flows toward the United 
States are corrected. 

Fortunately, the more thoughtful of 
our foreign partners understand these 
realities. In particular, many have 
understood that it is not the intense 
competition for investable funds— as 
reflected in high U.S. interest rates— 
that is holding back investment and 
growth abroad but, rather, slack de- 
mand for investment in their own coun- 
tries due to structural, institutional, and 
policy factors in those countries 

These points were begun to be made 
in the international dialogue during the 
last year, not by the Americans (though 
many of us had been suggesting them 
more or less directly for some time) but 
by our foreign friends and especially the 
Europeans. They were amplified at last 
spring's meeting of ministers at the 
OECD [Organization for Economic 
Cooperation and Development] and, 
especially, at the London economic sum- 
mit in June. Those meetings effectively 
set the agenda for international debate 
and action during this year and next. 

There are, broadly, three main focal 
points for our work during the coming 
year: structural adjustment, debt, and 
trade policies. 


Department of State Bulletin 


In our economic policy consultations 
with our main partners, we expect 
discussion to center on removing ob- 
tacles to structural adjustment. In 
general terms, this means that each 
country should analyze its own situation 
and outline its view about what it needs 
to do to promote change and adjust- 
ment. This is not an academic exercise. 
Failure to adjust to new circumstances 
means that growth is stifled, inflation is 
encouraged, and jobs are lost. Nowhere 
has the failure of policy and of social 
and economic institutions to cope with 
change been more dramatically brought 
home than in the fact that during 
roughly the last 10 years, while about 20 
million new jobs were created in the 
United States, Europe lost almost 2.5 

Each of us has more to learn about 
the process of change and the changes 
of policy we each might make to 
facilitate the adaptability of each of our 
societies. But the true value of interna- 
tional discussion will be realized only if 
we are honest with ourselves. There are 
no points to be scored by trying to 
justify past or current policies if these 
have manifestly failed to promote stable 
growth and new job creation. We 
ourselves believe that the key to suc- 
cessful change lies in the adoption of 
policies that permit the greatest scope 
for open markets to operate. We also 
believe our comparative success with 
such policies is such as to recommend 
them to others. But most important is 
that we ourselves continue on this 
course and improve on it where possible. 

Our capacity to adjust to change is 
the key to the future success of our 
strategies for handling critical issues in 
those functional areas which link na- 
tional economies to each other and make 
up what we refer to as the international 
economy— that is, the trade and finan- 
cial systems. In each of the last two 
economic summits, we have stressed the 
interrelationships among strategies for 
growth, debt, and trade. At both the 
Williamsburg and London summits, the 
leaders endorsed and refined their joint 
strategy for managing the international 
debt crisis which erupted so dramatically 
in the summer of 1982. 

Without rehearsing the elements of 
that strategy— all of which are well 
known to an audience like this— let me 
simply emphasize two main points. 

First, there is no short-term, quick- 
fix solution to the debt problem. It will 
be with us in one form or another 
through the rest of this century, if not 

Second, the real solution depends on 
the ability of debtors and creditors alike 
to adopt and stay with policies which 
best assure sustainable, noninflationary 
growth; continued adjustment in debtor 
countries to increase their capacity to 
export; and action by all to enhance the 
openness of markets for trade and direct 

Each aspect of this strategy is 
crucial, but given the force of protec- 
tionist pressure— especially as generated 
in the United States by the strength of 
the dollar— the biggest threat to our 
long-run success is the challenge to open 
trade and investment markets. Open 
trade is essential to efforts to keep infla- 
tion under control and to provide that 
additional stimulus to growth which 
every economy needs to move beyond 
the potential of its own resource base. 
Open trade and investment are central 
to the solution of the debt service prob- 
lems of debtors large and small and, 
thus, to the health of our domestic and 
international financial systems. Since we 
all have a stake in sustainable growth 
and financial stability, we all have a 
stake in open trade. 

Regardless of what the situation 
may be in other countries, we have 
found that, in a democracy like the 
United States, the only effective way to 
head off the forces of protectionism is to 
be engaged in a negotiating process 
designed to increase— not just main- 
tain—the openness of world markets. 
We and the Japanese launched just such 
a process during the past year, and the 
London summit endorsed the need for a 
decision on it by all GATT [General 
Agreement on Tariffs and Trade] parties 
at an early date. Our own target for 
that decision remains this coming year. 


This is our agenda for the years ahead. 
However, there are essentially three re- 
quirements we must meet if we are to 
manage successfully our international 
problems and create the conditions most 
conducive to achieving sustainable, 
noninflationary growth in both our own 
and the world economies. 

First, we must be able to cut 
through the misleading or self-serving 
rhetoric about the causes and cures of 
our main international problems and 
develop a clear-headed understanding 
about what has happened and how we 
need to cope with it. 

Second, we must have the imagina- 
tion and courage to identify and remove 
those obstacles to change that weaken 
or frustrate our ability to grow in 
response to market opportunities. 

Third, and perhaps the key to the 
second, we must move rapidly to begin 
new negotiations to enhance the open- 
ness of the international trade and in- 
vestment systems. ■ 

January 1985 



Multilateral Development Banks 


The United States participates in four 
multilateral development banks and 
funds (MDBs): the World Bank 
family— the International Bank for 
Reconstruction and Development 
(IBRD), its concessional window, the In- 
ternational Development Association 
(IDA), and the International Finance 
Corporation (IFC); the Inter-American 
Development Bank and its Funds for 
Special Operations (IDB/FSO); the Asian 
Development Bank and Fund (ADB/F); 
and the African Development Bank and 
Fund (AFDB/F). 

The World Bank makes loans to 
assist the growth of less developed coun- 
tries (LDCs) around the globe, while the 
regional banks focus on the development 
needs in their geographic area. Each 
MDB can provide concessional ("soft") 
loan and ordinary ("hard" or near- 
market-rate) loans to their borrowing 
members. In addition, the IFC, the 
ADB, and the proposed Inter-American 
Investment Corporation (IIC) can take 
equity (partial ownership) positions. Con- 
cessional loans are reserved for the 
poorest countries. 

MDBs are the largest source of 
sound economic policy advice and official 
development assistance available to the 
developing nations. In the MDBs' 1983 
fiscal year, they lent about $22.1 
billion— $16.2 billion from the World 
Bank group, $3 billion from the 
IDB/FSO, $2 billion from the ADB/F, 
and $930 million from the AFDB/F. 

Funding of MDBs 

From the beginning, the United States 
has been the largest contributor, but in- 
ternational cost sharing through the 
MDBs has become more equitable in re- 
cent years. In line with this shift in in- 
ternational economic responsibility, the 
U.S. share in every MDB— except the 
AFDB/F— has declined. Other donor 
countries now contribute about 75% of 
total MDB resources. Moreover, MDB 
borrowings from private capital markets 
multiply the donors' contributions, in- 
creasing the economic assistance that 
can be channeled through the hard-loan 

windows of the banks. Thus the pro- 
gram payout for each budgetary dollar 
paid into these windows by MDB 
members can be very high. For example, 
the World Bank is able to lend more 
than $60 for each dollar paid in by the 
United States. 

Role of MDBs 

By providing financing and technical 
assistance and serving as a financial 
catalyst, institution builder, and policy 
adviser, the MDBs foster LDC develop- 
ment policies that are pro-growth. 
MDBs have found that market-oriented 
economic systems generally provide the 
most conducive environment for that 

Because of their substantial 
resources, multilateral character, and 
well-earned reputation for professional 
expertise and impartiality, the MDBs 
are often more effective than a single 
donor country in advising developing 
countries on development planning and 
on necessary policy reforms. The MDBs 
insist that the borrower fulfill economic 
performance criteria for their loans— 
such as adequate rates of financial and 
economic return— and they encourage 
LDCs to adopt rational development 
policies. In response to the international 
debt crisis, the MDBs have adjusted 
their programs somewhat to be flexible 
in assisting countries undertaking the 
difficult process of economic adjustment. 

Proposed IIC for Latin America 

The United States has supported the 
establishment of the Inter- American In- 
vestment Corporation, modeled on the 
IFC and associated with the IDB. The 
IIC will invest primarily in privately 
owned and controlled medium and small 
enterprises in South and Central 
America. It will be capitalized at $200 
million; the U.S. share will be 25.5%. 
The United States has received im- 
plementing legislation from the Con- 

MDBs and U.S. Bilateral Aid 

Multilateral lending and U.S. bilateral 
aid have different advantages and com- 
plement rather than substitute for each 
other. Our bilateral aid program serves 
our economic, humanitarian, and 
strategic policy interests. Multilateral 
assistance primarily serves longer term 
U.S. interests by promoting a stable in- 
ternational economic environment, and 
it is cost effective. 

While continuing to support the 
MDBs, the United States has moved 
toward a greater emphasis on bilateral 
aid. This reflects a desire to enhance 
U.S. capability to respond rapidly in 
light of current foreign policy considera- 
tions to the urgent needs of specific 
countries and to increase gradually the 
financial self-reliance of the MDBs. Thus 
the United States balances bilateral and 
multilateral assistance to fashion a cost- 
conscious foreign assistance program 
that strongly advances U.S. national in- 

U.S. Commitment 

Since the creation of the World Bank at 
the end of World War II, the United 
States has played a leadership role in 
the MDBs, and we intend to continue 
our traditional support. Our participa- 
tion is designed to promote fundamental 
national interests in a more stable and 
secure world, which can best be achieved 
in an open, market-oriented interna- 
tional system. To the extent that the 
MDBs help advance the participation of 
the LDCs in that international system, 
they are one of the major vehicles 
available to support U.S. political, 
economic, and strategic interests, while 
improving standards of living for the 
world's poorest peoples. 

The United States is further commit- 
ted to working with the MDBs to im- 
prove their effectiveness. In particular, 
we seek to emphasize the role of the 
MDBs as catalysts for private capital 
flows and also the MDBs advisory role 
as sponsors of effective policies. 

Taken from the GIST series of November 
1984, published by the Bureau of Public Af- 
fairs, Department of State. Editor: Harriet 
Culley. ■ 


Department of State Bulletin 


Visit of the Grand Duke of Luxembourg 

His Royal Highness Grand Duke 
Jean of the Grand Duchy of Luxembourg 
made a state visit to the United States 
November 12-19, 1981+. While in 
Washington, D.C., November 12-15, he 
met with President Reagan and other 
government officials. 

Following are remarks made at the 
arrival ceremony, a White House state- 
ment, and the dinner toasts on Novem- 
ber 13. 

NOV. 13, 1984 1 

President Reagan 

Your Royal Highnesses, on behalf of the 
American people, Nancy and I welcome 
you to the United States. 

America and Luxembourg are bound 
together by the golden cords of friend- 
ship and family. Beginning more than 
100 years ago, thousands of Luxem- 
bourgers made the difficult journey 
across the Atlantic to the shores of the 
New World. And most traveled far in- 
land, and they played a vital role in set- 
tling the plains and forests of Min- 
nesota, Illinois, Iowa, and Wisconsin. 

Today, in the hearty town of Rolling 
Stone, Minnesota, people still celebrate 
your national festivals and speak the 
language of your country. 

It's literally true that the people of 
America and Luxembourg are cousins; 
yet perhaps the strongest tie between us 
is the sturdy bond of common ideals and 

January 1985 

heritage, for Luxembourg and America 
share the glorious background of 
American — or of Western history, I 
should say — all the lessons that men 
learned during the centuries-long 
passage to civilization. 

Both our nations cherish tolerance 
and rule of law. Both are guided by the 
will of the majority, while respecting the 
rights of the minority. Above all, both 
our peoples firmly believe that men and 
women can only achieve peace, prosperi- 
ty, and self-fulfillment when they live in 
liberty. In the words of Pope John Paul 
II, "Freedom is given to man by God as 
a measure of His dignity." 

In the past, the people of Luxem- 
bourg and America have stood together 
and fought together in the name of 
human liberty. Your Highness, you 
yourself fought side by side with 
American soldiers at Normandy just 40 
years ago. The American Third Army, 
under General George Patton, played a 
central part in the liberation of Luxem- 
bourg. And in a graveyard outside Lux- 
embourg City, General Patton and more 
than 5,000 American troops are laid to 

Today, Luxembourg and America 
stand together still. Luxembourg offers 
stalwart support to the North Atlantic 
Treaty Organization, of which we're 
both members. Your nation works 
tirelessly to keep the Western alliance 
strong by keeping it vigorous, and, in 
particular, by promoting a firmly united 

Europe. Luxembourg hosts the Euro- 
pean Investment Bank, the Secretariat 
of the European Parliament, and the 
Court of Justice. 

Just as we have shared the great 
challenges of the past, so Luxembourg 
and America share the bright hopes of 
the future. 

Our peoples are industrious and in- 
novative. And despite the difficulties 
that often go with changing economic 
circumstances, we in America are seeing 
a sustained economic expansion, while 
you in Luxembourg are experiencing the 
growth of new industries and services. 

In freedom, our peoples are conquer- 
ing material need and making break- 
throughs that will help millions to lead 
longer, fuller, and happier lives. 

Luxembourg is a proud and 
beautiful land, a country of lush forests 
and dramatic valleys, of rolling farmland 
and vigorous towns. It is our honor to 
welcome Luxembourg's beloved Grand 
Duke and Duchess to America. And it's 
our hope that while you're here, you will 
come to see some of our own nation's 
beauty and pride. May your time with us 
be joyful and rewarding. 

Grand Duke Jean 

The Grand Duchess and I are deeply 
moved by your so kind invitation, the 
warm welcome, and the numerous 
courtesies extended to us and to our 
party since our arrival in the United 

This ceremony has for me a par- 
ticular significance. How, indeed, could I 
forget that more than 40 years ago, in 
February 1941, I had the pleasure to ac- 
company my mother, Grand Duchess 
Charlotte, and my late father as per- 
sonal guests of President and Mrs. 
Roosevelt at the White House. 

In bitter times, when the independ- 
ence of our small country was at stake, 
we found comfort and guidance from a 
great President whose determination 
and leadership ultimately led to the final 
victory and recovery of democracy and 

It was indeed a long and painful way 
to go before the United States and 
Allied forces hit the beachheads of Nor- 
mandy on June 6th, 40 years ago. The 
marble crosses, thousands in number, 
reminded us both, and the other heads 
of Allied countries assembled at the Nor- 
mandy memorials in June,, of their 
sacrifice. We pledge never to forget 
their example. And I assure you that 
this promise is shared by all my fellow 
Luxembourgers, linked by a particularly 
strong bond to the men who gave their 
utmost during the Battle of the Bulge. 





More than 5,000 rest forever in our soil, 
with one of the great American soldiers, 
General George S. Patton. 

Restoring peace and democracy was 
certainly not an easy venture. It ap- 
peared, however, that preserving them 
would be even harder and more 
challenging and would certainly have 
been impossible without the commitment 
of the United States. The American 
engagement in Europe has provided the 
foundation for one of the longest periods 
of peace and prosperity our continent 
has ever enjoyed— to a large extent, our 
countries, to build the European Com- 

As I recall in this respect, Mr. Presi- 
dent, the declaration you made at Bonn 
in your speech on June 9th, 1982: 
"Europe's shores are our shores. 
Europe's borders are our borders. We 
will stand with [you] in defense of our 
heritage of liberty and dignity." We 
thank you for this statement and are 
pleased to assure that the fundamental 
values of the Atlantic alliance remain 
unchallenged on both sides of the Atlan- 

The links of my country with 
America are manifold. They go back to 
the times more than a century and a 
half ago when many of my countrymen 
immigrated to the north and north- 
western regions. We are very proud of 
the fact that our blood keeps circulating 
in American veins and that your country 
has been, also, built up by the labor of 
my compatriots. Yet these ties have 
deepened since the last war. For some 
decades now, the ties of political life and 
of military defense have steadily 
strengthened. For about 20 years, 
economic realities of every kind provide 
us with an American presence in Lux- 

My countrymen and I are very 
proud of the links which thus unite the 
smallest country of the European Com- 
munity to the great American nation. 
Such is the message I should like to 
transmit to you, Mr. President, with all 
my congratulations and best wishes for 
your new Presidency. 

NOV. 13, 1984 2 

Grand Duke Jean met with the Presi- 
dent today. It was the first state visit 
from Luxembourg in over 20 years. This 
wai of enormous significance to the 
Grand Duke, coming 1 day after the 
20th anniversary of the Grand Duke's 
■i to the throne. 


Luxembourg has pursued a pro-U.S., 
pro-NATO foreign policy, and the Presi- 
dent expressed to the Grand Duke his 
appreciation for Luxembourg's support 
in this effort. Luxembourg is an active 
member of the Atlantic alliance. It plays 
a pivotal role in our common security 
policies, particularly for logistics, reen- 
forcement, and communications. 

Luxembourgers, and the Grand 
Duke in particular, have a strong attach- 
ment to this country. The Grand Duke 
reiterated his family's great appreciation 
for our wartime assistance, beginning 
with the evacuation of the Royal Family 
in 1940. As you know, the Grand Duke 
lived in Washington during World 
War II. 

The Grand Duke and the President 
had met previously at Normandy in 
June, and this was of special significance 
to the Grand Duke, who was then a 
lieutenant in the Irish Guards and par- 
ticipated in the Normandy invasion. 
The Grand Duke recalled his ex- 
periences with the American Army that 
liberated Luxembourg 40 years ago. 
And he noted that he is especially 
pleased to be able to spend time this 
week with the U.S. Army's Fourth In- 
fantry Division at Ft. Carson, Colorado, 
and this is the unit that he accompanied 
on the liberation of Luxembourg. 

The President, on his part, reviewed 
our efforts to reestablish a productive 
dialogue with the Soviets on all issues, 
and in arms control, in particular. The 
President provided the Grand Duke an 
idea of where we hope to go in the sec- 
ond Reagan term. And, in addition, the 
Grand Duke indicated that the strong 
vote of confidence the President re- 
ceived from the American electorate will 
enable this Administration to deal with 
the Soviets from a position of great con- 

The Grand Duke noted that Luxem- 
bourg will assume the Presidency of the 
European Community in the latter half 
of 1985. And he noted that he would 
want his government to work closely 
with the United States in managing the 
U.S. Economic Community relations. 

President Reagan reviewed the 
latest developments in Central America, 
and of particular interest to the Grand 
Duke was the positive turn toward 
democracy in El Salvador under Presi- 
dent [Jose Napoleon] Duarte. 

NOV. 1.3, 1984 3 

President Reagan 

Yesterday the people of Luxembourg 
marked a great, day in the life of their 

nation, the 20th anniversary of the 
ascension to the throne of His Royal 
Highness Grand Duke Jean. Your 
Highness, on behalf of all Americans, 
permit me to give you and your people 
our heartfelt congratulations. 

It's a deep honor to welcome you to 
the White House as you begin your visit 
to our country. Permit me to add that 
when you reach California, Nancy and I 
would like you to give that great State 
our love. [Laughter] You see, as the 
result of a certain political exercise that 
concluded a week ago, it looks as though 
we won't be living back there for— oh, 
maybe not till 1989. [Laughter] 

Luxembourg possesses a thousand 
years and more of national history. It's a 
beautiful and a varied land, ranging 
from the forests and hills of the north to 
the fertile plains of the south. It's a 
prosperous country with a mighty steel 
industry and dozens of new industries 
and services gathering strength. And it's 
a nation of self-confidence and charm, 
with a gracious way of life based on an 
abiding love of family and freedom. Lux- 
embourg is a proud and alluring coun- 

Yet, Luxembourg acquires still 
greater strength and vitality as an ac- 
tive member of the family of nations. It 
was a founder of both the North Atlan- 
tic Treaty Organization and the Euro- 
pean Community. In your free and fair 
world trade, Luxembourg has set an ex- 
ample for all nations to follow and 
shown the world that prosperity comes 
not with less but more international 

Individual Luxembourgers have 
rendered outstanding diplomatic serv- 
ices. Robert Schuman, one of the leading 
advocates of a united Europe, was a 
native of your country. Joseph Bech was 
instrumental in bringing the European 
Coal and Steel Community to Luxem- 
bourg in 1951. And men like Gaston 
Thorn and Pierre Werner have played 
memorable roles in world diplomacy. 
Over the years, relations between 
Luxembourg and the United States have 
been those of close and abiding friends. 
We view with the deepest respect your 
contributions to NATO, including the 
registration of AWACs aircraft and 
your splendid efforts during the En- 
forcer exercises. And we look forward 
to consulting closely with your govern- 
ment when Luxembourg assumes the 
Presidency of the Council of the Euro- 
pean Community during the latter half 
of next year. 

We in the United States are con- 
vinced that the Western world faces a 
future of strength and prosperity. In re- 
cent years, the Western allies have 

Department of State Bulletin 


stood together against the bluff and 
bluster of our adversaries and become 
more firmly united than ever. And 
although all o( us have passed through 
difficull periods of economic adjustment, 
many of our basic industries are becom- 
ing more efficient, and breakthroughs in 
high technology and other new fields are 
leading our nations into a time of sus- 
tained growth. For Luxembourg, 
America, and so many other tree na- 
tions, today our future promises not 
stagnation and decline, but opportunity 
ami hope. 

And tonight, as we look to the 
future, it's fitting to remain mindful of 
our past. Forty years ago. Your 
Highness, Americans and Luxem- 
bourgers fought side by side to liberate 
your nation. Throughout America today, 
there are thousands of men who can still 
recall the tear-streaked faces of your 
people when they realized that at long 
last they were free. 

To me, the most memorable story is 
about a strapping young American 
named George Mergenthaler. For 
several weeks, George was stationed in 
the village of Eschweiler, in World War 
II. He had a winning personality and, 
before long, the good people of 
Eschweiler took him into their homes 
and hearts. They told him what life in 
the village had been like before the war 
and then during the Nazi occupation. 
And George, in turn, opened his heart. 
He told the people that he was an only 
son, told them all his hopes for when the 
war was over. And in those few weeks, 
a deep bond formed between the people 
of that ancient village and the amiable 
young Yankee. 

Some time afterward, the people of 
Eschweiler learned that George had 
taken part in a fierce battle on the 
plains between Luxembourg and 
Belgium. It was called the Battle of the 
Bulge. And it cost George his life. 

Today, 40 years later, there is still a 
plaque honoring George Mergenthaler in 
the Eschweiler village church. It reads 
simply: "This only son died that others' 
sons might live in love and peace." 

Well. Your Highness, today our sons 
and daughters know that peace. And the 
bond between our nations is truly a bond 
of love. 

Now. ladies and gentlemen, if you 
would please join me in a toast to their 
Royal Highnesses, the Grand Duke and 
Duchess of Luxembourg, our friends. 

Grand Duke Jean 

The Grand Duchess and I would like to 
express our sincere gratitude for your 
invitation, your gracious hospitality, and 
your kind words regarding our country. 

Luxembourg— A Profile 


Nationality: Noun— Luxembourger(s). Adjec- 
tive— Luxembourgish. Population (1983): 
365,000. Annual growth rate: Less than 1%. 
Ethnic gToups: Celtic base with French and 
German blend; also, guestworker residents 
from Portugal, Italy, and other European 
countries. Religion: Roman Catholic. 
Languages: Luxembourgish, French, Ger- 
man. Education: Years compulsory — 9. At- 
tendance— 100%. Literacy— 100%. Health: 
Infant mortality rate— 12/1,000. Life expec- 
tancy (1980-82)— 70 yrs. men, 76.7 yrs. 
women. Work force (161,000): Agricul- 
ture — 4.7%. Industry and commerce — 35.6%. 
Services— 48.7%. Government— 11%. 



Area: 2,586 sq. km. (1,034 sq. mi.); about the 
size of Rhode Island. Cities: Capital— Lux- 
embourg (pop. 80,000). Other cities— Esch- 
sur-Alzette, Dudelange, Differdange. Ter- 
rain: Continuation of the Belgian Ardennes 
in the north, heavily forested and slightly 
mountainous; extension of French Lorraine 
Plateau in the south, with open, rolling coun- 
tryside. Climate: cool, temperate, rainy; like 
Pacific Northwest. 


Type: Constitutional monarchy. In- 
dependence: 1839. Constitution: 1868. 

Branches: Executive — grand duke (chief 
of state). Legislative — bicameral Parliament 
(Chamber of Deputies and Council of State). 
Judicial — Superior Court. 

Political parties: Christian Social Party 
(CSV), Socialist Party (POSL), Democratic 
(Liberal) Party (PD), Communist Party 
(PCL), Green Alternative Party. Suffrage: 
Universal over age 18. 

Central government budget (1983): 
$1.23 billion. 

Defense: 2.84% of 1983 budget. 

National holiday: June 23. 

Flag: Three horizontal stripes — red, 
white, and sky blue — from top to bottom. 


GDP: $3.52 billion. Annual growth rate: 
-1%, 1981-83; -1%, 1984. Per capita income 
(1983): $9,643. Avg. inflation rate (1983-84): 

Natural resources: Iron ore. 

Agriculture (2.4% of GNP): Products- 
dairy, corn, wine. Arable land — 43.9%. 

Industry (30% of GNP): Types— steel, 

Trade (1983): Exports— $1.7 billion: steel, 
plastics, and rubber products. Major 
markets — FRG, Belgium, France. Im- 
ports — $2.05 billion; minerals (including ore, 
coal, and petroleum products), mechanical 
and electrical equipment, transportation 
equipment, scrap metal. Major suppliers — 
other EC countries. 

Official exchange rate (Sept. 1984): 
flux 60 = US$1. 

Fiscal year: Calendar year. 

Membership in International 

UN and its specialized agencies, Organization 
for Economic Cooperation and Development 
(OECD), Benelux Customs Union, Interna- 
tional Energy Agency, Belgium-Luxembourg 
Economic Union (BLEU), European Com- 
munity (EC),- NATO, INTELSAT. 

Taken from the Background Notes of October 
1984, published by the Bureau of Public Af- 
fairs, Department of State. Editor: Juanita 
Adams. ■ 

May we express our great pleasure at 
this opportunity as the first head of 
state to congratulate you personally on 
the overwhelming result of your reelec- 
tion to a second term as President of the 
United States. As a matter of fact, we 
had never any doubt about the outcome. 

We are confident that this great na- 
tion, under your able leadership, will 
continue to give the necessary guidance 
to all the countries of the free world and 
encourage democracies in their endeavor 
to promote freedom. 

January 1985 



There are no problems which 
separate the United States and Luxem- 
bourg. How could it be otherwise, when 
America, on two occasions, played a 
paramount role in the liberation of my 

In 1918, as well as in 1944, young 
Americans gave their lives in order to 
free the Grand Duchy from foreign op- 
pression. These sacrifices I recall at a 
particularly appropriate time. This year, 
1984, marks the 40th anniversary of the 
liberation of occupied Europe, including 
Luxembourg, and the final victory of the 
Battle of the Ardennes. 

The people of Luxembourg will 
never forget the generous help of their 
American friends, which twice preserved 
our freedom and our independence. Cor- 
responding to our national motto, we 
wish to remain what we are. This is the 
reason why, after leaving Washington, I 
will visit Colorado Springs in order to 
pay tribute to the American Army and 
Air Force. 

We all know relations between our 
two countries are excellent. I am con- 
vinced that we could improve them even 
more. As mutual understanding, upon 
which friendship is based, exists be- 
tween us, there should be no difficulty to 
proceed successfully in this way. 

Back home, my countrymen follow 
with interest and pride this visit of their 
head of state. They know it is a token of 
sympathy of a great nation to the Grand 
Duchy of Luxembourg. 

I beg you to accept, Mr. President, 
along with all my thanks, my coun- 
trymen's best wishes of happiness and 
prosperity for your nation and yourself. 

May I add a special thanks to you 
for having mentioned my 20th anniver- 
sary which took place yesterday on the 
12th of November when I took over 
from my dear mother. It was really 
awfully kind of you to mention it this 

May I ask you now to rise for a 
toast to the President of the United 
States of America, to the well-being and 
the prosperity of the American people, 
and to the friendship between Luxem- 
bourg and the United States. 

Reflections on 
East-West Relations 

'Made on the South Lawn of the White 
House where Grand Duke Jean was accorded 
a formal welcome with full military honors 
(texl from Weekly Compilation of Presiden- 
tial Documents of Nov. 19, 1984). 

ide by the principal deputy press 
the I'resident Larry Speakes 
(texl from Weekly Compilation of Presiden- 
of Nov. 19, 1984). 
•Mad<- in thi State Dining Room of the 
White Hou e (text from Weekly Compilation 
of i'n idential Document* of Nov. 19, 

[) m 

by Arthur F. Burns 

Address before the Chamber of In- 
dustry and Commerce in West Berlin on 
November 27, 1981*. Mr. Burns is U.S. 
Ambassador to the Federal Republic of 

I appreciate the opportunity to address 
this distinguished audience on the topic 
of East- West relations. The city of 
Berlin provides an especially appropriate 
setting for discussing this vital subject. 
No city expresses more poignantly the 
tragic division of Europe. No city points 
more clearly to the need for finding 
reasonable and effective ways to over- 
come this division. 

Berliners know at firsthand the 
problems that a divided Europe has 
created and the difficulties of resolving 
them. With the Berlin Wall as a con- 
stant reminder, you have no illusions 
about finding easy solutions. You know 
only too well that a united will, for- 
titude, and patience are essential for a 
better future. 

Berliners also know that there is 
reason for hope. The conclusion of the 
Quadripartite Agreement 13 years ago 
demonstrated that reasonable solutions 
can be found to some of the practical 
problems confronting the people of 
Berlin— despite seemingly insurmount- 
able East- West differences. That agree- 
ment has been strikingly successful. 
Because of it, West Berliners today live 
more securely, travel more freely, and 
enjoy closer contacts with their friends 
and relatives in East Berlin and in the 
German Democratic Republic than was 
possible 13 years ago. 

Berliners, thus, have reason for op- 
timism. You know that some improve- 
ment in the lives of individuals and 
families has been achieved here. You 
realize that further improvements are 
both needed and possible. And you can 
remain confident that additional prog- 
ress, when and as it emerges, will foster 
the trust needed to attain the wider 
peace— in an environment of justice and 
freedom— that we all seek. 

As Berliners, all of you know that 
the development of better relations be- 
tween the Federal Republic of Germany 
and the German Democratic Republic 
also involves human relations at its very 
core. As in the case of your divided city, 

there is a need to find practical solutions 
to the painful problems resulting from a 
divided German nation. This is bound to 
be a protracted process that will have its 
frustrations as well as successes. A fun- 
damental task for all of us is to keep in 
mind the humanitarian goal of this proc- 
ess and not allow it to be subordinated 
to other objectives. 

The people and the Government of 
the United States welcome the develop- 
ment of closer ties between East and 
West Germany. President Reagan 
specifically endorsed this objective in his 
September address to the UN General 
Assembly. Constructive dialogue be- 
tween the two German states is obvious- 
ly of great importance to the well-being 
of the German people, and we in the 
United States are ready to do whatever 
we can to encourage it. Americans share 
the hope of the German people that a 
process of peaceful evolution will 
ultimately lead to a reunified and 
democratic Germany in a Europe that 
has been freed of its barbed wire and 
imprisoning walls. 

The Need for a Constructive 
U.S. -Soviet Relationship 

As everyone by now recognizes, the 
relationship between my own country 
and the Soviet Union is a matter of vital 
importance to the future of Ger- 
many—indeed, the future of the entire 
world. It is now nearly 40 years since 
the conclusion of World War II. During 
this period, Europe has enjoyed the 
blessing of peace— a condition that the 
political and military unity of the West 
has made possible. It is a disconcerting 
fact, nevertheless, that we in the West 
and the Warsaw Pact in the East find 
ourselves burdened with permament 
garrisons and growing stockpiles of ar- 
maments. Not only is the cost of this 
commitment of men and materiel high in 
economic terms but so, also, is the 
spiritual and psychological cost of per- 
sistent tension. 

The logic of the situation clearly re- 
quires that we work with the Soviet 
Union to establish a more harmonious 
relationship. I can assure you that Presi- 
dent Reagan and his Administration at- 
tach the highest priority to that goal. As 
we Americans and our European friends 
ponder the state of the world and lay 
plans for a better future, every civilized 


Department of State Bulletin 


impulse tells us that a constructive rela- 
tionship between the United States ami 
the Soviet Union must be the focus of 
our concern. 

Last January, the President de- 
scribed at some length America's policy 
toward the Soviet Union, ami he 
reiterated our basic policy in his recent 
address to the UN General Assembly. 
What the President keeps stressing is 
the urgent need to establish a good 
working relationship with the Soviet 
Union— a relationship marked by greater 
cooperation and understanding. It is this 
point— America's commitment to a 
realistic, productive East- West dia- 
logue—that I, too, wish to emphasize 
this evening. I know that our European 
allies share this commitment. 

Relations between countries are a 
highly complex and sensitive matter. 
Governments, unfortunately, do not 
always behave calmly and rationally. 
They are run by individuals who, like 
each of us, share the frailty of human 
nature. To some degree, incomplete 
understanding is an inherent part of life 
itself. We find it among members of the 
same family, between employers and 
their workmen, between pastors and 
their parishioners, between teachers and 
their students. Opportunities for 
misunderstanding are all the greater 
among governments of sovereign coun- 
tries, being separated— as they usually 
are— by differences of language, history, 
and culture as well as by geography. I 
have found that, even in day-to-day life, 
it is very difficult to re-establish trust 
between individuals once it has broken 
down. I convey no secret in saying to 
you that Soviet-American relations are 
currently in a difficult phase— a phase in 
which the gigantic task of building trust 
and confidence has become essential and 
is being undertaken. 

Steps for Improving the 
East-West Climate 

I would like to comment this evening on 
several steps that all of us in the 
Western community— both Americans 
and Europeans— could take to promote 
such an auspicious development. These 
steps would, I believe, contribute to im- 
proving the East-West climate and allow 
relations to develop on a sounder basis 
than has been the case in the recent 

The first step I would stress is the 
need on all sides to soften the rhetoric 
concerning East- West relations. A stri- 
dent rhetoric cannot contribute to 

building the bridge of trust that is 
needed between NATO countries and 
those of the Warsaw Pact. It is par- 
ticularly important that the United 
States, being a thoroughly self-assured 
nation, extend to the Soviet Union the 
constructive attitude, the civility, and 
the consideration that are necessary for 
a useful dialogue. I, of course, hope that 
the Soviet Union will behave in a similar 

I also believe that political leaders 
and journalists throughout the West 
need to exercise greater self-discipline 
and avoid rhetoric that tends to exag- 
gerate Western differences with regard 
to East-West relations or that arouses 
unrealistic public expectations of what 
can be quickly achieved or paints a 
gloomier picture than is warranted by 
the actual state of affairs. All of us, of 
course, are concerned with the problem 
of East-West relations and may wish to 
voice our views; but we need to do that 
in ways that avoid exciting public pas- 
sions or run the risk of feeding opinions 
that harm the cause we all support. The 
time" has surely come for calm and 
dispassionate discussion of East- West 
relations— not only between East and 
West but also among ourselves. 

The second point I would make is 
that we must look forward rather than 
to the past. By this I mean that we 
should not expect East-West relations to 
revert in the future to the policies and 
ways that we associate with the detente 
of the 1970s. History rarely repeats 
itself that precisely, nor should we ex- 
pect that. We must learn from the past 
but not seek to duplicate it. Improved 
relations between the Soviet Union and 
the United States, which I believe will 
come, will be a new historical phase in 
this relationship and may well assume 
new forms. 

It would be naive to expect that the 
difficulties of recent years can simply be 
skipped over and that the relationship 
between the United States and the 
Soviet Union can be resumed at the 
point at which it began to deteriorate. 
One reason for occasional differences 
between Americans and Europeans is 
that our peoples have not evaluated the 
results of detente in exactly the same 
way. Europeans saw benefits from the 
process of detente, as did the American 
people. What Americans also saw, 
however, and what Europeans may have 
underestimated while emphasizing the 
positive results, was the accompanying 
Soviet pattern of military adventure and 
neglect of human rights. From an 

American perspective, our national in- 
terests being of global scope, the balance 
of good and ill resulting from detente 
was definitely less favorable for us than 
for Europeans who could see the 
beneficial results much more directly 
than the regrettable elements of Soviet 

Europeans need to recognize that 
Soviet behavior over the past 
decade— ranging from its enormous 
arms buildup at a time when American 
defense outlays were actually declining 
to its intervention in Afghanistan and 
Poland— could not leave America unaf- 
fected. Those who fail to see this have 
little understanding of the American 
people or of the role that the United 
States must, of necessity, play in today's 
world. No American administration, 
whether Republican or Democratic, 
could have closed its eyes or reacted in a 
perfunctory manner to such a series of 
deplorable Soviet actions. 

Nonetheless, and this is my third 
point, we must, at the present time, 
begin building the foundation for a new 
stage of East- West relations. Perhaps 
the best way to do this is to seek im- 
mediate progress on limited, specific 
issues and not become disheartened by 
the formidable difficulties encountered 
in seeking large and comprehensive 
agreements. As in the case of Berlin, we 
have to look at the entire agenda of 
outstanding issues and decide which of 
them— no matter how minor— may be 
conducive to early agreement. Progress 
on a range of such specific issues can 
contribute to building the trust and con- 
fidence necessary for more ambitious ef- 
forts. To be sure, it is eminently 
desirable that constructive dialogue pro- 
ceed simultaneously in all areas of East- 
West relations; and yet, it may be that 
significant progress on the crucial arms 
and security issues can take place only 
as psychological attitudes improve- 
especially among the governing 
authorities of the East. And while we in 
the West would like to see East-West 
problems resolved quickly and thorough- 
ly, history warns that sweeping interna- 
tional agreements that lack underpin- 
nings of precise definition and mutual 
trust can, in the long run, do more harm 
than good. 

My fourth point is that there are to- 
day at least two areas in which we can 
soon take such modest steps— the area 
of personal exchanges and of coopera- 
tion in other nonpolitical matters. My 
visits to the Soviet Union and my deal- 
ings with Soviet citizens have convinced 
me that maintaining direct communica- 
tion and learning as much as possible 

January 1985 



about one another are essential to im- 
proving governmental relations. I recall, 
going back to the 1960s, a diatribe 
against the United States by a Moscow 
official to which I made no reply beyond 
frowning; but when he loudly boasted 
that the Soviets were more successful 
than Americans in controlling smoke 
from electric power stations, I promptly 
remarked: "Thank you for pointing this 
out, because we must, indeed, learn 
from you." That simple human sentiment 
proved sufficient to pave the way for the 
thoroughly civilized conversation be- 
tween us that followed. 

I firmly believe that it is to the ad- 
vantage of both East and West to 
strengthen student exchange programs; 
improve cooperation in scientific, 
cultural, and commercial endeavors; and 
seek, whenever possible, to bring 
citizens together. It is, after all, the 
Soviet side that has built walls across 
Europe, and it is in our interest to show 
that we welcome contacts between our 

My fifth point relates primarily to 
us in the Western community. NATO is 
clearly a stronger alliance now than it 
was 2 or 3 years ago. I, nevertheless, 
believe that we must seek a closer con- 
sensus in the West on the subject of 
East- West relations. It is true, of 
course, that our differences are often ex- 
aggerated. We must honestly recognize, 
nevertheless, that our viewpoints have 
differed at times and to some degree 
still do. Given our democratic traditions 
and the difficult times in which we live, 
that should not be at all surprising. But 
as we work at improving the East-West 
relationship, it is essential that we in the 
West have a clearer understanding of 
where we want to go in our relations 
with the East and what specific policies 
are most likely to lead us there. 

In addition to clarifying how we in 
the West envision the new era which we 
may be entering and how we can handle 
East-West relations most effectively, it 
is highly important, from an American 
viewpoint, that we make progress on 
such troublesome issues as defense 
burdensharing and ways of dealing with 
security problems outside Europe. We 
also need to ponder whether Western 
preoccupation during the past year or 
two with reaching an arms control 
agreement may not have led us to 
neglect efforts to reach better under- 
standing with the Soviet Union on other 
political issues. Reduction of nuclear and 
other lethal weapons is ohviously a mat- 

• of very great importance, but we 
must not delude ourselves into thinking 
that it is a sufficient condition for the 
maintenance of peace. 

Reaching a broader consensus in the 
West is necessary because the truth of 
the matter is that none of us can im- 
prove the East- West relationship acting 
alone. We in the United States should 
not be expected to do it by ourselves. 
The effort must be a joint one so that 
we can minimize future misunderstand- 
ings within the alliance as well as 
misperceptions of our unity by the East. 
And once we arrive at a firm consensus, 
we will need to be more patient, as well 
as more consistent, in the pursuit of our 
jointly reached policies than we have 
been, at times, in recent years. 

My sixth and final point is that we 
in the Western democracies, unlike the 
closed societies, must see to it that our 
people understand that the maintenance 
of our economic, military, and moral 
strength is the best guarantee we can 
have of peace in our times. We must see 
to it that our people accept the need for 
firm and unified defense policies as well 
as for measures directed toward reduc- 
ing East- West tensions. Just as Berlin 
could not have survived the past 40 
years if it had stood alone, neither could 
the West have survived if it had been 
weak or divided. By making it impossi- 
ble for the Soviet Union to intimidate 
us, the NATO alliance has provided 
Europe with the longest period of peace 
in our century. Western solidarity has 
been the key to all our past progress in 
the relationship with the East, and I am 
confident that it will so remain in the 
years ahead. 

Some well-meaning individuals in my 
country, as well as here in Western 
Europe, have put forward simplistic pro- 
posals for relieving East- West ten- 
sions — among them, unilateral disarma- 
ment by the West or an instantaneous 
freeze on deploying new nuclear 
weapons. Such proposals are dangerous 
to the cause of peace and must be 
decisively refuted by responsible political 
leaders in North America and Western 
Europe. I fear that some of our citizens, 
particularly among young people, 
overlook the complexities in the East- 
West relationship. Western policies un- 
doubtedly deserve public scrutiny, but 
they must not become the subject of 
hasty experimentation. The real 
challenge facing the West is not that of 
deciding whether to be red or dead but 
the far more difficult one of assuring 
that these never become our alter- 

I have dwelt on the tensions be- 
tween the United States and the Soviet 
Union because it is vital that we do what 
we responsibly can to improve our rela- 
tionship. But in the interest of a bal- 
anced perspective, I must also note that 

despite America's disagreements with 
the Soviet Union, contacts between our 
two countries continue to take place on 
many levels. The September meetings of 
President Reagan and Secretary Shultz 
with Foreign Minister Gromyko have 
been the most visible of these contacts. 
Others take place routinely. I myself 
meet from time to time with the Soviet 
Ambassadors in Berlin and Bonn to 
discuss matters of mutual interest. 

Without doubt, we in the United 
States have been deeply concerned over 
last year's withdrawal of Soviet 
negotiators from the crucial talks on 
nuclear weapons in Geneva. But the 
suspension of these talks did not 
discourage us from hoping that they will 
soon be resumed or from persisting in 
efforts to find common ground in other 
areas. And we have actually made some 
progress — for example, in technically 
improving prompt communication be- 
tween our two governments. 

There are other hopeful signs. The 
Conference on [Security- and 
Confidence-Building Measures and] 
Disarmament in Europe is continuing to 
function in Stockholm; the Vienna talks 
on reducing conventional forces are still 
in progress; and the Conference on 
Disarmament is still pursuing its work. 
Most important of all, as announced a 
few days ago, the difficult process of 
negotiating verifiable arms control 
agreements with the Soviets will soon be 
resumed. To be sure, all these are slow- 
moving and, at times, disheartening 
negotiations; but we must remain pa- 
tient and persist in our attempts to im- 
prove East- West relations. President 
Reagan set an example in his address to 
the UN General Assembly when he sug- 
gested periodic consultations by senior 
Soviet and American experts on regional 
problems as well as the institutionalizing 
of periodic ministerial meetings to 
discuss the entire agenda of issues be- 
tween the United States and the Soviet 
Union. Chairman Chernenko's recent 
comments suggested some sympathy 
with the President's approach and con- 
tributed to further useful diplomatic con- 

I assure you that the United States 
is prepared to discuss with the Soviet 
Union all arms control topics, including 
weaponry in outer space as well as 
strategic and intermediate-range nuclear 
systems. My government will persevere 
in its resolve to move dialogue with the 
Soviet Union in a constructive direction. 
The obstacles to progress are many; the 
reasons for overcoming them are, 
therefore, all the more compelling. 


Department of State Bulletin 


Shared Ideals 

Let me close these reflections on East- 
West relations by referring once again 
to your wonderful city. Berlin is not only 
a city of brave and determined people; it 
also embodies the things we Americans 
believe are worth defending. I personally 
cherish my ties to Berlin. I come here 
often, not only because of the attrac- 
tions offered by this metropolis; I come 
here to work and to refresh the spirit. 

Berlin is a city to which Americans 
easily relate. You have traditionally 
drawn energetic people from all parts of 
Germany and given them a chance to 
prove themselves. Rank and status are 
less important here than energy and 
talent. These are values that Americans 
share and admire. 

We are, therefore, working closely 
with Berliners, the Federal Republic [of 
Germany], and our British and French 
allies to help ensure that the Western 
sectors of Berlin remain a significant 
force in the modern world. There are ex- 
citing possibilities here in the realm of 
science and technology, business enter- 
prise, urban planning, and social and 
educational innovation. We see our task 
as not only defending the city but 
cooperating with you in these areas to 
keep Berlin a vibrant and attractive 
world capital. We recently joined 
Berliners in establishing a committee to 
promote new ways of cooperation be- 
tween us— particularly in the areas of 
economic interchange, dealing with ur- 
ban problems, and expanding student 
exchanges. We rejoice in Berlin's recent 
economic recovery; we are confident and 
optimistic about your future; and we 
assure you of our determination to play 
a positive role— at your side— in the 
city's development. 

In American eyes, progress always 
requires a firm basis. At present, the 
position of the allies in your city is in- 
evitably intertwined with the unique 
status of Berlin and the city's security. 
We regard our function here as being, in 
effect, trustees of the German nation. 
We do not consider present divisions of 
this city as permanent. Until the day 
when both parts of Berlin and Germany 
are reunited in freedom, the presence of 
the allies in Berlin provides the irre- 
placeable foundation for the well-being 
of this city. 

Maintaining that foundation in- 
evitably imposes some burdens for all 
concerned. I well know that the training 
of troops in your forests and other cir- 
cumstances arising from our presence 
are not always easy to contend with. 
But you can be sure that Americans will 

remain sensitive to your concerns and 
that we will do everything possible to 
minimize the difficulties we sometimes 
cause in the process of defending the 
security and freedom of this city. 

Allow me to say, in conclusion, that 
peace and freedom are inseparable from 
us in the West. The heroic example of 

the citizens of Berlin during the airlift of 
1948-49 showed that peace and freedom 
can be preserved even under the most 
difficult circumstances. There is good 
reason to believe that they will be fully 
preserved in our world today and 
handed down to the generations that 
follow us. ■ 

Visit of West German 
Chancellor Kohl 

Chancellor Helmut Kohl of the 
Federal Republic of Germany made an 
official working visit to Washington, 
B.C., November 29-30, 198U, to meet with 
President Reagan and other government 

Following are remarks made by 
President Reagan and Chancellor Kohl 
after their meeting on November 30. l 

President Reagan 

Chancellor Kohl and I met today to 
discuss a wide range of issues. Charac- 
teristic of our relationship, our talks 
were friendly, useful, and productive. 
There's a high level of cooperation and 
personal rapport between us. As always, 
I was glad to have such thorough con- 
sultations with the Chancellor and his 

And I call your attention to the joint 
statement issued as a result of today's 
discussions. It underlines our common 
commitment to improving East- West 
relations, improving NATO's conven- 
tional defenses, and intensifying our 
search for arms reductions. 

We place special emphasis on over- 
coming the barriers that divide 
Europe — a division keenly felt by those 
living in central Europe. I was pleased 
to reaffirm to Chancellor Kohl today our 
support for his efforts to lower the bar- 
riers between the two German states. 

The close relationship between the 
United States and the Federal Republic 
of Germany is enhancing the opportuni- 
ty for improved East- West relations. 
This is demonstrated by our successful 
efforts to carry out the NATO dual- 
track decision to seek genuine arms 
reductions agreements and modernize 
our defenses. 

Today, Chancellor Kohl and I firmly 
agreed that we will continue to place a 
high priority on the search for a respon- 
sible means of reducing the arsenals of 
nuclear weapons that now threaten 
humankind. And we call upon all men 
and women of good will to join us. 

The solidity of the German-American 
partnership remains a crucial building 
block in the search for world peace. The 
people of our two countries, blessed with 
liberty and abundance, have a great 
desire for peace. Chancellor Kohl and I 
share that desire, and we'll continue to 
work diligently to bring about a more 
peaceful world. 

The German-American relationship, 
now in its fourth century, must never be 
taken for granted. We launched a major 
initiative in 1982 to nurture an apprecia- 
tion of ties between us to enhance 
German- American contacts at all levels. 
Chancellor Kohl and I noted today the 
enthusiastic public response in our 
respective countries, especially among 
our younger citizens, to the growing ex- 
changes between our peoples. 

In sum, our talks confirmed the 
closeness of our views and the commit- 
ment to work together. It was a 
pleasure to have Chancellor Kohl, 
Foreign Minister [Hans-Dietrich] 
Genscher, and all of his party, here. I 
wish them a smooth journey home, and I 
look forward to the next time that we 
can get together. 

Chancellor Kohl 2 

My talks with President Reagan — with 
you, dear friend, today — was, as always, 
intensive, close, and trustful. 

My talks served to maintain the con- 
tinuity of our very personal and friendly 
relationship. President Reagan and I 
made it a highly important moment in 
world affairs, and I sincerely hope that 
we were able to open up good and 
positive perspectives. 

The fact that a new phase can be ini- 
tiated in East- West relations is due, on 
the one hand, to the firm and united at- 
titude of the Western alliance and, on 
the other, to the joint determination to 
continue to seek dialogue and necessary 
negotiations with the East. 

In our talk today, the President and 
I discussed the subject of East- West 

January 1985 



relations, arms control, and joint efforts 
in the alliance for improving its conven- 
tional defense capability. 

The Government of the Federal 
Republic of Germany fully supports the 
development emerging in U.S. -Soviet 
relations, which are, in our view, the 
centerpiece of East- West relations in 
general. The President and I consider it 
important that the Western European 
allies be associated with this process, 
thus creating the conditions for the 
renewed bilateral U.S.-Soviet dialogue 
being placed on a wider foundation in 
the medium and long term. 

The close, friendly, and trusting 
relationship with the United States, as 
demonstrated in today's talks once 
again, is of great significance for the 
strengthening, cohesion, and solidarity 
of the alliance. 

The President informed me of the 
American ideas for the exploratory talks 
to be started on the 7th and 8th of 
January 1985 between Secretary [of 
State George] Shultz and [Soviet Union] 
Foreign Minister [Andrey] Gromyko. 
These talks, which are taking place on 
the basis of an umbrella concept 
developed by the United States, open up 
new perspectives and opportunities for 
arms control negotiations. 

Mr. President, for very good reasons 
you referred in your remarks to the 
joint declaration which we have adopted. 
This declaration is intended to illustrate 
the link between improved East- West 
relations, concrete steps for arms con- 
trol and disarmament, and the 
maintenance of our security through 
adequate defense. 

One of the key elements of the joint 
declaration is the desire, particularly in 
view of the recent developments in East- 
West relations and in the field of arms 
control, to intensify and enhance the 
alliance's comprehensive, close consulta- 
tions within this sphere. 

Furthermore, we intended to ensure 
that the alliance strengthens further its 
conventional defense capability. To this 
end, we consider it necessary to coor- 
dinate the existing initiatives and pro- 
posals for better implementation of the 
valid NATO [North Atlantic Treaty 
Organization] strategy, thus permitting 
available resources to be used more 

Our goal is to raise the nuclear 
threshold in this manner and to enhance 
the alliance's ability to defend itself 
against any kind of war, be it conven- 
al or nuclear. 

oint declaration is of great im- 
portance in two re peel Firstly, it is 
: immediately after the over- 
nfirrnation in office of the 


American President by the American 
people, and at the start of a new phase 
of East-West relations in which all na- 
tions, and not least the divided German 
nation into two parts of Germany, place 
high hopes. We are thus affirming our 
desire to lay a new, a constructive, and 
a lasting foundation for stable East- 
West relations. 

Secondly, by reflecting our full 
agreement on essential questions affect- 
ing our two countries, this statement 
constitutes a symbol and a future- 
oriented yardstick for close German- 
American cooperation. We are resolved 
to make our contributions toward fur- 
ther developing within the alliance our 
cooperation on this basis. 

Though this was only a very brief 
working visit, I should like to express to 
you, Mr. President, my dear friend, our 

sincere thanks for the cordial hospitality 
extended to us and for the very friendly 
reception you have been giving to us. 
It's good in difficult times, and at 
moments when you have to make dif- 
ficult decisions, to know that you have a 
good friend in the White House. And we 
are appreciative and grateful for that. 

'Made on the South Portico of the White 
House (text from the Weekly Compilation of 
Presidential Documents of Dec. 3, 1984). 

2 Chancellor Kohl spoke in German and 
his remarks were translated by an inter- 

Editor's Note: The text of the joint state- 
ment issued at the conclusion of their 
meeting was not available to include in this 
issue. It will be published in the February 
1985 Bulletin. ■ 

ICJ Hears U.S. Argument 
Against Nicaraguan Claim 

by Davis R. Robinson 

Introduction to the oral argument 
before the International Court of Justice 
(ICJ) in The Hague on October 15, 198U- 
Mr. Robinson is the Legal Adviser of the 
Department of State. 

It is an honor to argue once again in 
1984 before the International Court of 
Justice (ICJ) in the representation of my 
country. The United States maintains 
now, as it did in April, that this court is 
manifestly without jurisdiction over 
Nicaragua's claims. By appearing again 
to argue this conviction, the United 
States reaffirms its commitment to the 
rule of law in international relations and 
its faith and expectation that this Court 
will rule on the issues presently before it 
in accordance with that law. 

The United States welcomes this op- 
portunity to present to the Court its 
views in oral argument on the questions 
of the jurisdiction of the Court and the 
admissibility of Nicaragua's application 
of 9 April 1984. The positions of the 
United States %re set out in detail in the 
U.S. Countermemorial of 17 August 
1984. In accordance with Article 60 of 
the Rules of Court, the United States 
will focus in oral argument on those 
issues that still divide the parties. We 
shall do our best to follow the 
President's entreaty for conciseness and 

The context in which our argumen- 
tation on jurisdiction and admissibility 

will be made must be set forth at the 

Events in Central America 

This case arises out of events in Central 
America, specifically armed hostilities 
occurring throughout that region. As the 
United States will explain, those armed 
hostilities are relevant to many of the 
issues under consideration in this phase 
of the proceedings. Conversely, and 
more importantly, these judicial pro- 
ceedings have significant implications 
for current diplomatic efforts to bring 
the conflict to an end. 

The United States invites the 
Court's attention to three specific 
features of the armed hostilities in Cen- 
tral America: 

First, that the hostilities extend 
across state borders and involve all the 
states of the region; 

Second, that, although there are 
complex economic, social, and political 
causes that underlie the armed 
hostilities, the hostilities also have a 
more direct cause— the armed attacks of 
Nicaragua against its neighbors; and 

Third, that a durable peace in Cen- 
tral America can only be expected from 
multilateral negotiations, among all the 
interested states, that comprehensively 
address the economic, social, political, 
and security problems that plague the 
region. Such negotiations are already^ 
underway in the "Contadora process," a 
framework that has been endorsed by 

Department of State Bulletin 


the IN Security Council and the 

Organization of American States (OAS). 
All of the Central American States, in- 
cluding Nicaragua, have agreed to the 
Contadora process. It is the view not 
only of the United States but also of all 
the Central American states other than 
Nicaragua that adjudication by this 
Court of Nicaragua's bilateral claims 
may be expected to hinder, not assist, 
those delicate negotiations. 

U.S. Secretary of State Shultz sum- 
marized the multilateral character of the 
disputes in Central America in his sworn 
affidavit of 14 August 1984, submitted 
with the U.S. Countermemorial, and I 

There has been widespread recognition 
that, despite Nicaragua's efforts to portray 
the conflict as a bilateral issue between itself 
and the United States, the scope of the con- 
flict is far broader, involving not only cross- 
border attacks and State support for armed 
groups within various nations of the region, 
but also indigenous armed opposition groups 
within countries of the region. It has been 
further recognized that under these cir- 
cumstances, efforts to stop the fighting in the 
region would likely be fruitless and ineffec- 
tive absent measures to address the 
legitimate economic, social and political 
grievances of the peoples of the region which 
have given rise to such indigenous armed op- 
position. [U.S. Annex 1, pp. 4-5.] 

In a statement in April to the 
Security Council by its representative to 
the United Nations, Honduras similarly 

[T]o cast the Central American problem 
in terms of Nicaragua's interests ... is a con- 
ceptual error. It is not just one country which 
is affected; it is not only one country which is 
suffering from conflicts. It is not only one 
people which is suffering and bewailing the 
fate of its children ... It is a Central 
American problem . . . and it must be solved 
regionally. [U.S. Annex 60, U.N. Doc. 
S/PV.2529, at p. 37.] 

To the same effect, the Government 
of Costa Rica advised the Court on 18 

The "case" presented by the Government 
of Nicaragua touches upon only one aspect of 
a more generalized conflict that involves 
other countries within the Central American 
area as well as countries outside the region. 
[U.S. Annex 102.] 

And El Salvador stated to the Court 
in its 15 August 1984 Declaration of In- 
tervention that, and I quote: 

In its view everyone has acknowledged 
that the Central American phenomenon has 
moved beyond the scope of simple bilateral 
treatment and has become a regional issue 
entailing the participation of multilateral in- 
terests. [Declaration of Intervention of 15 
August 1984, at p. 19.] 

Nicaragua's attempt to characterize 
the dispute underlying its claims as 
bilateral is thus belied not only by the 
views of the United States but also by 
the official views of the governments of 
Central America. 

Nor can there be any serious dispute 
that Nicaragua aids, abets, incites, pro- 
vokes, and often initiates armed attacks 
against its neighbors. Thus, Secretary of 
State Shultz observed in his affidavit of 
14 August 1984: 

The information available to the Govern- 
ment of the United States through diplomatic 
channels and intelligence means, and in many 
instances confirmed by publicly available in- 
formation, establishes that the Government 
of Nicaragua has, since shortly after its 
assumption of power in 1979, engaged in in a 
consistent pattern of armed aggression 
against its neighbors. Other responsible of- 
ficials of the United States Government, in- 
cluding the President and the responsible 
Committees of the United States Congress 
having access to such information, share this 
view. [U.S. Annex 1, p. 1.] 

In confirmation of Secretary Shultz's 
statement, it may be noted that, in 
December 1983, the U.S. Congress made 
an explicit statutory finding that 

Nicaragua was "providing military sup- 
port (including arms, training, and 
logistical, command and control 
facilities) to groups seeking to overthrow 
the Government of El Salvador and 
other Central American Govern- 
ments. . . ." [U.S. Annex 42, 97 Stat. 
1473 at p. 1475.] More detailed findings 
with respect to Nicaragua's aggression 
against its neighbors may be found in a 
May 1983 report to the Permanent 
Select Committee on Intelligence of the 
U.S. House of Representatives, which is 
quoted at page 77 of the U.S. 

The states of Central America con- 
firm the conclusions of the United 
States in this regard and have so in- 
formed this Court. The Government of 
the Republic of El Salvador, for exam- 
ple, stated in its 15 August 1984 
Declaration of Intervention [at p. 2]: 

El Salvador considers itself under the 
pressure of an effective armed attack on the 
part of Nicaragua and feels threatened in its 
territorial integrity, in its sovereignty, and in 
its independence, alojigLwith the other Cen- 
tral American countries. ... El Salvador 
comes here to affirm before the International 
Court of Justice and before the entire world, 

The Legal Adviser 

Davis R. Robinson was born July 11, 1940, in 
New York City. He is a Phi Beta Kappa 
graduate of Yale (B.A., 1961) and received 
his law degree cum laude from Harvard 

From 1961 through 1969, Mr. Robinson 
was a Foreign Service officer, his first tour 
being Vice Consul at the U.S. Consulate 
General in Alexandria, Egypt. While there he 
was temporarily assigned as the acting Con- 
sul at the U.S. Embassy in Amman, Jordan. 

After a leave of absence to attend Harvard 
Law School, he was an attorney-adviser in 
the Office of the General Counsel of the U.S. 
Arms Control and Disarmament Agency 
(ACDA) and then served as staff assistant to 
the Secretary of State. 

Mr. Robinson was an associate with the 
law firm of Sullivan and Cromwell in New 
York from 1969 to 1971. In 1971 he became 
an associate, and in 1975 a partner, in the 
law firm of Leva, Hawes, Symington, Martin 
and Oppenheimer in Washington, D.C. In 
private practice, he had a broad corporate 
background, with participation in numerous 
financings and in various regulatory matters. 
He also has experience in commercial arbitra- 
tion and litigation, including a successful ap- 
pearance in a case before the U.S. Supreme 

He is a member of the U.S. Supreme 
Court, District of Columbia, and New York 
Bars, as well as of various professional 
organizations, including the American Society 
of International Law and the American and 
Federal Bar Associations. He is the author of 
a 1970 article published in the American 
Journal of International Law entitled "The 
Treaty of Tlatelolco: A Latin American 
Nuclear Free Zone." 

Mr. Robinson was sworn in as the Legal 
Adviser of the Department of State on July 
30, 1981. ■ 

January 1985 



the aggression of which it is a victim through 
subversion that is directed by Nicaragua, and 
that endangers the stability of the entire 

The representative of Honduras 
stated to the Security Council in April of 
this year— a few days before 
Nicaragua's application was filed: 

My country is the object of aggression 
made manifest through a number of incidents 
by Nicaragua against our territorial integrity 
and civilian population. Those elements, 
which have obliged [Honduras] 1 to strengthen 
its defenses are mainly the disproportionate 
amount of arms in Nicaragua, the constant 
harassment along our borders, the promotion 
of guerrilla groups which seek to undermine 
our democratic institutions, and the war- 
mongering attitude of the Sandinist com- 
manders. [U.S. Annex 60, U.N. Doc. 
^S/PV.2529 pp. 37-38.] 

To the same effect, the Government 
of Costa Rica has repeatedly made 
diplomatic representations to Nicaragua 
protesting "attack[s] on Costa Rica ter- 
ritory . . . and on members of the Armed 
Forces of Costa Rica"; "gratuitous ag- 
gression" by Nicaragua; and "flagrant 
violations of the national territory" of 
Costa Rica. [United States Annex 63.] 
Numerous other examples of statements 
by Central American governments com- 
plaining of Nicaragua's aggression 
toward them, and additional evidence 
confirming those complaints, may be 
found in the U.S. Countermemorial and 
the annexes thereto. 

Nicaragua has repeatedly made 
sanctimonious statements to this Court, 
including a sworn statement by 
Nicaragua's Foreign Minister, that 
Nicaragua is not engaged in armed at- 
tacks against its neighbors. As we have 
just shown, these statements are direct- 
ly contradicted by the public statements 
of all of Nicaragua's neighbors and by 
all of the senior U.S. officials— in both 
the executive and legislative 
branches— with access to the full range 
of relevant diplomatic and intelligence 

Contadora Negotiations 

The bloodshed in Central America ex- 
tends throughout Central America, and 
one of its principal causes is the aggres- 
sion of Nicaragua. The question that all 
responsible statesmen must ask is, how 
can this bloodshed most effectively be 
ended? The states of Central America, 
including Nicaragua, have agreed that 
the multilateral Contadora negotiations 
offer the best hope for a lasting peace in 
the region. The UN Security Council, 
the Organization of American States, 
and. ffio I recently, the Foreign 

Ministers of the European Community 
have all endorsed the Contadora 

The United States, too, supports the 
Contadora negotiations and is engaged 
in bilateral negotiations with Nicaragua 
in support of those multilateral talks. 
Just 10 days ago in New York at the 
UN General Assembly session, Secretary 
of State Shultz cited the Contadora 
Process as an "outstanding example" of 
how states may resolve their most bitter 
disagreements. Secretary Shultz ob- 
served that Contadora "can lead to 
negotiated arrangements under which 
stability and peace and economic 
development are much more possible. 
We support that process." 

In its oral presentation to the Court 
last week, Nicaragua attempted to por- 
tray the United States as a major 
obstacle to the successful achievement of 
Contadora's objectives. Nicaragua 
argued that it is willing to sign a draft 
agreement, the so-called "Acta," and 
that only the United States is preventing 
a general acceptance of that draft agree- 
ment by all the Central American states. 
Nothing could be farther from the truth. 

Contrary to Nicaragua's assertions, 
the United States has welcomed the 17 
September draft acta as a significant ad- 
vance in the Contadora process. The 
Court will see from examining the docu- 
ment [U.S. Supplemental Annex 1] that 
the 17 September draft acta is only 
what it purports to be— a draft. The 
document contemplates comments by in- 
terested parties. Indeed, those com- 
ments are due today. 

The United States has objected only 
to Nicaragua's demands that the Central 
American states halt their negotiations 
and make a final agreement from what 
is on its face an intermediate draft. The 
present draft is clearly incomplete with 
respect to several of the most important 
issues. By way of example, the Court 
will note that the draft acta con- 
templates that there will be a commis- 
sion for verification and control to verify 
the commitments to end illegal traffick- 
ing in arms and support to paramilitary 
forces. The commission will thus be re- 
quired to conduct surveillance in the five 
states in the region, along thousands of 
miles of border and coastline, through 
jungle and mountainous terrain. Yet the 
draft acta fails to specify the composi- 
tion of the commission, to provide for a 
budget or staff, or to determine the 
location of the commission's head- 
quarters and field offices. 

What is important to emphasize here 
is that the view that further changes are 
necessary is shared by all four of the 
Central American states other than 

Nicaragua and by the four Contadora 
states— Mexico, Colombia, Venezuela, 
and Panama. All of these states have 
made statements indicating that further 
negotiations are necessary. This view is 
also shared by the states of Western 
Europe, as reflected in a joint communi- 
que of 29 September of the Foreign 
Ministers of the European Community, 
Portugal, Spain, the Central American 
states, and the Contadora states, 
meeting in Costa Rica. The joint com- 
munique specifically describes the draft 
acta as a "stage" in the Contadora 
negotiations — not as the conclusion of 
the negotiations. [U.S. Supplemental An- 
nex 2.] 

Nicaragua alone wishes to stop the 
Contadora negotiating process at the 
stage of an intermediate draft agree- 
ment. Under these circumstances, 
Nicaragua cannot plausibly contend that 
it is the United States that is blocking 
progress in the negotiations. 

Just as it is Nicaragua alone that 
seeks to prevent further Contadora 
negotiations, it is Nicaragua alone that 
seeks to adjudicate bilateral aspects of 
those multilateral negotiations before 
this Court. Again, it is useful to quote 
the other Central American states in 
this regard. Thus, El Salvador stated in 
its letter to the Court of 17 September, 

El Salvador is persuaded in the con- 
siderations of its own survival as a nation 
that to subject an isolated aspect of the Cen- 
tral American conflict to judicial determina- 
tion at this time would cut straight across the 
best hopes for a peaceful solution. ... [Em- 
phasis added.] 

To the same effect, Honduras ad- 
vised the Secretary General on 18 April 
1984 as follows: 

Once again the Government of Nicaragua 
is seeking to flout the Contadora negotiation 
process by attempting to bring the Central 
American crisis, essentially a political issue, 
under the jurisdiction of the International 
Court of Justice. This is detrimental to the 
negotiations in progress and fails to recognize 
the resolutions of the United Nations and the 
Organization of American States or the full 
international endorsement that the Contadora 
peace process has so deservedly received. 
[U.S. Annex 104, p. 5.] 

In a press release of 16 April 1984 
Guatemala stated: 

The Central American issue should be 
discussed by the Contadora Group; [and] any 
attempt to seek another forum or interna- 
tional body in order to discuss security prob- 
lems of a political, economic, and social 
nature has a negative impact on the Con- 
tadora process. [U.S. Annex 105.] 

And Costa Rica advised the Court in 



Department of State Bulletin 


Whatever measures which the Court 
might adopt in the "case" presented for its 
consideration, taking such measures outside 
the context of the complete political and 
military situation that prevails in the Central 
American region, could become a distorting 
factor in the difficult equilibrium sought by 
the Forum of Contadora in a broader 
framework of solutions and could com- 
promise, if not undertaken with prudence and 
equity, all possibilities of success for the 
"Forum of Contadora." [U.S. Annex 102.] 

There is. therefore, unanimous 
agreement among the Central American 
states other than Nicaragua that ad- 
judication of Nicaragua's claims by this 
Court seriously risks undermining the 
possibilities for Contadora's achievement 
of peace in Central America. Surely this 
apprehension will come as no surprise to 
the experienced statesmen and jurists of 
this Court. Complex multilateral 
negotiations require a delicate balance of 
concessions and compromises. If, in the 
midst of such negotiations, one party 
achieves some or all of its negotiating 
objectives elsewhere, the balance of con- 
cessions and compromises may be ir- 
retrievably upset. Indeed, the 
negotiating equilibrium may be pro- 
foundly disturbed if the parties believe 
that one of them may achieve its objec- 
tives elsewhere. As Secretary Shultz 
observed in his 14 August affidavit: 

The United States considers . . . that in 
the current circumstances involving ongoing 
hostilities, adjudication is inappropriate and 
would be extremely prejudicial to the existing 
dispute settlement process. ... To permit one 
party to create a parallel dispute settlement 
process dealing with only one aspect of the 
dispute and of the issues required to be ad- 
dressed in a comprehensive solution would af- 
fect adversely the current multilateral and 
bilateral negotiating processes encompassed 
in the Contadora framework, and could, in 
the opinion of the United States, delay, if not 
forestall, an end to the fighting. [U.S. Annex 
1, pp. 8-9.] 

The Questions of ICJ Jurisdiction and 
the Admissibility of Nicaragua's 

The potential problems for the Con- 
tadora negotiations are not the only fun- 
damental issues raised by the present 
proceedings. The present proceedings 
also raise basic questions with respect to 
the nature of the Court's jurisdiction and 
the functioning of the UN system as a 
whole. At issue are, inter alia, the 
allocation of functions among the institu- 
tions of the United Nations by the UN 
Charter, and the principles of state con- 
sent, reciprocity, and equality of states 
that are the fundamental premises for 
this Court's jurisdiction over disputes 
between sovereign states. 

The specific arguments of the 
United States with respect to jurisdic- 
tion and admissibility must, therefore, 
be viewed in light of: 

(1) The relationship of these judicial 
proceedings to the current diplomatic at- 
tempts to end armed hostilities in Cen- 
tral America; 

(2) The implications of accepting 
jurisdiction over Nicaragua's application 
for the continued viability of the com- 
pulsory jurisdiction of the Court; and 

(3) The proper relationship of this 
Court to other UN organs. 

The United States makes five 
specific arguments in this regard. 

First, Nicaragua has never accepted 
the compulsory jurisdiction of this Court 
under the optional clause contained in 
Article 36 of the Court's statute. 
Nicaragua does not, therefore, have the 
legal right to invoke that jurisdiction 
against the United States. This argu- 
ment presents the Court with the un- 
precedented question of whether a state 
that has never agreed to be a Respond- 
ent may now appear before the Court as 
an Applicant. The plain terms of the 
Court's Statute, supported by an over- 
whelming mass of secondary evidence, 
indicate it may not. It would, moreover, 
transgress the basic notions that 
underlie this Court's adjudicative func- 
tion: first, the requirements of sovereign 
consent to any judicial process; second, 
the need for reciprocity of obligation 
between the states concerned; and third, 
the sovereign equality of states. These 
fundamental tenets of legal relationships 
among nation states will be violated if 
Nicaragua is permitted to present claims 
before this Court after decades of 
Nicaragua's knowing refusal to submit 
itself to claims by other states. It will be 
the privilege of the Agent of the United 
States to address this fundamental 
jurisdictional defect that results from 
the manifest failure of Nicaragua to ac- 
cept the compulsory jurisdiction of this 

Second, jurisdiction is necessarily 
absent because the United States, too, 
has not consented to adjudication in the 
circumstances of this case. Nicaragua's 
claims come within the scope of a reser- 
vation to the U.S. 1946 declaration 
known as the "multilateral treaty reser- 
vation." This argument requires the 
Court to apply the plain language of one 
of the basic conditions upon which the 
United States consented to this Court's 
compulsory jurisdiction under the Op- 
tional Clause. This point has additional 
significance because five other states 
have identical or similar reservations to 
their declarations. Thus, the Court's in- 

terpretation of the reservation of the 
United States will necessarily affect 
their rights as well. Deputy Agent of the 
United States Norton will discuss this 
reservation following the presentation of 
the U.S. agent. 

Third, Nicaragua's claims come 
squarely within the terms of a 6 April 
note to the Secretary General of the 
United Nations that temporarily 
modified the U.S. 1946 declaration 
before Nicaragua's application was filed. 
Irrespective of the applicability of the 
multilateral treaty reservation, 
Nicaragua's claims are excluded by the 6 
April note from the scope of the U.S. 
consent to this Court's jurisdiction. This 
argument also goes to the very root of 
this Court's compulsory jurisdiction, that 
is, to the mandatory requirement of 
state consent. The question is: Does the 
Court have jurisdiction under Article 
36(2) of its Statute when, before an ap- 
plication is filed, a declarant state in- 
dicates unequivocally that it does not 
consent to this Court's adjudication of 
the claims involved? State practice and 
the jurisprudence of this Court require a 
ruling that the Court does not have 
jurisdiction under these circumstances. 
The effect and validity of the 6 April 
note will be explained by Professor 
Myres McDougal, Sterling Professor of 
Law, Emeritus, the Yale Law School; 
and Professor of Law, the New York 
Law School. 

Fourth, Nicaragua's application re- 
quests, in effect, a determination by this 
Court to perform the functions that the 
Charter of the United States confides to 
the political organs, in particular the 
Security Council, with respect to situa- 
tions of ongoing armed conflict. The 
Nicaraguan application concedes that its 
claims before this Court are identical to 
those it placed before the Security Coun- 
cil in connection with its request that 
the Council determine the existence of a 
threat or breach of the peace or of acts 
of aggression. The April application of 
Nicaragua, therefore, presents one of 
the most important institutional ques- 
tions that has ever come before the 
Court — the proper allocation of func- 
tions among the institutions of the 
United Nations. Nicaragua's claims are 
entrusted by the UN Charter to resolu- 
tion by the political organs of the United 
Nations, and in this case to resolution by 
the regional arrangement known as the 
Contadora process — not to this Court. 
This question will be addressed by Pro- 
fessor Louis Sohn, Woodruff Professor 
of International Law at the University 
of Georgia Law School and Bemis Pro- 
fessor Emeritus at the Harvard Law 

January 1985 


Fifth, regardless of whether this 
Court has jurisdiction stricto sensu, the 
Nicaraguan application is also inadmissi- 
ble on each of four additional separate 
grounds. The application would 
necessarily present the legal interests of 
states not party to the case as the very 
subject matter of decision. The applica- 
tion would necessarily interfere with 
universally endorsed regional negotia- 
tions to end an ongoing armed conflict. 
The application would necessarily 
disrupt the political mechanisms to 
which the Charter has entrusted situa- 
tions of ongoing armed conflict. And 
finally, the application would necessarily 
require adjudication of claims during 
ongoing armed hostilities and, as such, 
would present severe obstacles to the 
judicial role of the Court in the 
discovery of truth and the fashioning of 
an effective remedy. These questions 
will be discussed by Professor John Nor- 
ton Moore, Brown Professor of Law at 
the University of Virginia. 

Each of the five arguments of the 
United States is independent. None re- 
quires the development of any further 
record nor an inquiry into the merits of 
Nicaragua's substantive claims. Each is 
now before the Court as an immediate 
basis for dismissal. If the United States 
is correct with respect to any one of the 
five arguments— that is, if Nicaragua is 

ICJ Decision 

On November 26, 1984, the International 
Court of Justice (ICJ) determined that it had 
jurisdiction over Nicaragua's claims against 
the United States. The Court found, by a 
vote of 11 to 5, that Nicaragua had accepted 
the Court's compulsory jurisdiction and that 
the United States had also acceded to that 
jurisdiction for purposes of this case. The 
Court found, by a vote of 14 to 2, that there 
was jurisdiction to consider the narrower 
question of whether any of Nicaragua's 
claims violate provisions of the 1956 bilateral 
Friendship, Commerce and Navigation Trea- 
ty. On the basis of these two specific votes 
(with only Judge Stephen M. Schwebel of the 
United States dissenting on both votes), the 
Court made a general finding, by a vote of 15 
to 1 , that it had jurisdiction to entertain the 

Finally, the Court unanimously rejected 
the U.S. arguments on admissibility to the ef- 
fect that Nicaragua's claims involving an 
ongoing armed conflict were, by their nature, 
committed to the political organs of the 
I Nations, not the Court; thus, the 
Court found itself an appropriate forum for 
Nicaragua's claims against the United States. 
The Court made no decision on the merits of 
Nicaragua's complaint. 

unable to meet its burden of persuasion 
to the contrary on each of these 
arguments — Nicaragua's application 
must be dismissed. 

Before the United States commences 
its discussion of the first argument 
relating to Nicaragua's own lack of con- 
sent, we wish to call the Court's atten- 
tion to the relative responsibilities of the 
parties in the present phase of the case. 
Counsel for Nicaragua has correctly 
noted [CR 84/13, at p. 12] that, consist- 
ent with standard practice in all judicial 
fora, this court ruled in the Temple case 
that "the burden of proof . . . will of 
course lie on the Party asserting or put- 
ting" forward a contention. [I.C.J. 
Reports 1962, pp. 15-16.] As the agent 
of Nicaragua said in a different and in- 
appropriate context in last week's oral 
proceeding, "the burden of proof is on 
the accuser." [CR 84/12, p. 24.] 
Nicaragua asserts that there is jurisdic- 
tion over its claims and that its applica- 
tion is admissible. The burden of sustain- 
ing those contentions, in the words of 
the Court, "will of course lie on" 

This result, moreover, is clearly 
foreseen by the Rules of Court and 
reflected in the Orders of the Court to 
date in this case. Article 38 of the Rules 
of Court requires: "The Application shall 
specify as far as possible the legal 
grounds upon which the jurisdiction of 
the Courts is said to be based . ..." Ar- 
ticle 38 thus indicates that it is the appli- 
cant who must satisfy the Court of the 
"legal grounds" for jurisdiction and ad- 

Further, the Court's Order of 14 
May directed Nicaragua to proceed first 
in the written pleadings, and the Presi- 
dent of the Court, at a meeting with the 
Agents on 5 October, directed, with no 
objection from either government, that 
Nicaragua proceed first in oral argu- 
ment. This order of pleading clearly im- 
plies that the burden rests with 
Nicaragua on the issues of jurisdiction 
and admissibility. The order of pleading 
also conclusively refutes the suggestion 
of Nicaraguan counsel last week [CR 
84/13, at p. 11] that the case is at the 
stage of preliminary objections under 
Article 79 of the Rules of Court. In this 
regard, Article 79 specifically requires 
the respondent to plead first when 
preliminary objections are in issue. That 
Article 79 is inapplicable in this stage is 
also made clear by the Court's Orders of 
10 and 14 May 1984 which make no 
reference to that provision. Further- 
more, the current procedural stage is in 
keeping with a line of precedents that 
began with the Fisheries Jurisdiction 

The United States would submit that 
the present phase of proceedings raises 
analogous considerations to those 
underlying Article 53 of the Statute of 
Court pursuant to which the Court must 
satisfy itself "that it has jurisdiction." 
Thus, in at least six prior cases, the 
Court has directed the applicant, even in 
the absence of the respondent, to satisfy 
the Court that it had jurisdiction and the 
same reasoning applies to questions of 
the admissibility of the application. [See 
the two Fisheries Jurisdiction cases, 
I.C.J. Reports 1972, p. 3 at pp. 8-14, 
and ibid., p. 49 at pp. 54-63; the two 
Nuclear Tests cases, I.C.J. Reports 1974, 
p. 253, at p. 259, and ibid., p. 457, at p. 
463; the Pakistani Prisoners of War 
case, I.C.J. Reports 1973, p. 382; and the 
Aegean Sea Continental, I.C.J. 
Reports 1978, p. 3, at pp. 13 et seq.] 
Nicaragua bears the same burden here. 

With the Court's permission, the 
United States would like to make one 
final prefatory remark. The United 
States has for many years been among 
the strongest supporters of this Court 
and of international adjudication 
generally. Consonant with this 
longstanding history of support for the 
Court, the United States wishes to em- 
phasize at the outset of these pro- 
ceedings that it considers the jurisdic- 
tional and admissibility questions before 
the Court today as of grave significance 
not only for the situation in Central 
America but also for the continued effec- 
tiveness of the compulsory jurisdiction 
of the Court under the Optional Clause. 

Furthermore, it must be recalled 
that the judicial settlement of interna- 
tional disputes is but one of the proper 
means of peaceful settlement of certain 
international disputes. In certain cir- 
cumstances, like those presented here, 
the UN Charter specifically requires 
other means, consistent with state prac- 
tice of long duration. The various other 
means of peaceful settlement may, in 
many instances, be more likely to result 
in an effective, lasting resolution of a 
given dispute than the adversarial proc- 
esses of bilateral adjudication. Among 
the other means of a peaceful settlement 
of international disputes endorsed by the 
Charter is negotiation, such as that now 
being conducted on a multilateral region- 
wide basis under the Contadora process. 
The United States wishes to emphasize 
that support of such a negotiating proc- 
ess, intended to resolve complex 
multilateral disputes' on an agreed basis, 
is in no way inconsistent with the 


Department of State Bulletin 



general support of the United Stales for 
international adjudication. 

Nor, by opposing the Court's 
jurisdictions over Nicaragua's claims, 
does the United States intend to suggest 
that international law is inapplicable to 
the conduct of the United States or to 
events in Central America. International 
law governs the situation in Central 
America regardless of whether this 
Court adjudicates Nicaragua's claims, 
just as international law governs the 
conduct of the vast majority of the 
member states of the United Nations 
that, for whatever reason, have never 
accepted the compulsory jurisdiction of 
this Court under the Optional Clause. 

International adjudication before the 
Court can only be an efficacious means 
of peaceful dispute resolution if states 
respect the authority of the Court. They 
will do so only if they can expect a 
determination of their rights in accord- 
ance with the law. A state is, in par- 
ticular, entitled to expect that any 
limitations placed on acceptance of the 
Court's jurisdiction, and any limitations 
on that jurisdiction arising out of the 
Charter of the United Nations and the 
Statute of the Court itself, will be fully 
respected. Only by a scrupulous 
adherence to this legitimate expectation 
of sovereign states may international ad- 
judication by this Court continue to 
serve as an effective, peaceful means of 
international dispute resolution, and only 
by such scrupulous adherence may this 
Court play the important role con- 
templated for it under the Charter of 
the United Nations. 

Visit of Iraqi Deputy Prime Minister 

'Original states "Nicaragua" here. This 
was corrected by a letter of 25 April 1984 
from the Government of Honduras to the 
Secretariat of the United Nations. See last, 
unnumbered page of U.S. Annex 60. ■ 

Deputy Prime Minister Tariq M. Aziz of the Republic of Iraq made a visit to Washington, 
D.C., November 24-29, 1984, to meet with President Reagan and other government of- 
ficials. On November 26, the Governments of the United States and Iraq agree to resume 
diplomatic relations. ■ 

Continuation of Iran Emergency 

NOV. 7, 1984 1 

Section 202(d) of the National Emergency 
Act (50 U.S.C. 1622(d)) provides for the 
automatic termination of a national emergen- 
cy unless, prior to the anniversary date of its 
declaration, the President publishes in the 
Federal Register and transmits to the Con- 
gress a notice stating that the emergency is 
to continue in effect beyond the anniversary 
date. In accordance with this provision, I 
have sent the enclosed notice stating that the 
Iran emergency is to continue in effect 
beyond November 14, 1984, to the Federal 
Register for publication. Similar notices were 
sent to the Congress and the Federal 
Register on November 12, 1980, No- 
vember 12, 1981, November 8, 1982, and 
November 4, 1983. 

The crisis between the United States and 
Iran that began in 1979 has eased, but has 

not been fully resolved. Although the interna- 
tional tribunal established to adjudicate 
claims of U.S. nationals against Iran and of 
Iranian nationals against the United States 
continues to function, full normalization of 
commercial and diplomatic relations between 
the United States and Iran will require more 
time. In these circumstances, I have deter- 
mined that it is necessary to maintain in 
force the broad authorities that may be need- 
ed in the process of implementing the 
January 1981 agreements with Iran and in 
the eventual normalization of relations with 
that country. 

Ronald Reagan 

'Identical letters addressed to Thomas P. 
O'Neill, Jr., Speaker of the House of 
Representatives, and George Bush, President 
of the Senate (text from Weekly Compilation 
of Presidential Documents of Nov. 12, 
1984). ■ 

January 1985 



Visit of Fiji Prime Minister Mara 

Prime Minister Ratu Sir Kamisese 
Mara of Fiji made an official working 
visit to Washington, B.C., Novem- 
ber 25-29, 1984, to meet with President 
Reagan and other government officials. 

Following are remarks made by 
President Reagan and Prime Minister 
Mara after their meeting on 
November 27 } 

President Reagan 

It's been both an honor and a pleasure 
to have Prime Minister Ratu Mara of 
Fiji and his wife as our guests. And this 
is an historic occasion. The Prime 
Minister is the first head of state from 
the nine independent Pacific Island na- 
tions to pay an official visit here at the 
White House. 

The Fijian nation he so ably 
represents is a model of democracy and 
freedom, a tremendous example for all 
the countries of the developing world. 

Fijians can be proud, indeed, that in 
their country people from diverse 
religious, racial, and cultural 
backgrounds live and work together in 
peace and freedom. This accomplish- 
ment, and it is a great accomplishment, 
is a tribute to your democratic institu- 
tions and to the character of your peo- 

Mr. Prime Minister, when you 
return to your country, I hope you will 
convey to your citizens the deep respect 
and admiration of the American people. 

Fijians are our brothers and sisters 
in the family of democratic nations. We 
share values that are at the heart of our 
the most important of which is 
our abiding love of human liberty. That 
wa> under cored to many Americans 

who fought alongside Fijians in the Sec- 
ond World War, during the Solomon 
Island campaign, a turning point in the 
Pacific theater. We stood together then 
in the cause of human freedom. That 
bravery is matched today by the 
magnificent commitment that your peo- 
ple have made to the cause of peace. 
Under your leadership Fiji has become a 
vital part of international peacekeeping 
missions in the Sinai and in Lebanon. 
And America knows all too well the 
price that peacekeepers sometimes pay. 
Your fallen heroes of peace have a place 
in our hearts. 

Fijians have put themselves on the 
line and won the gratitude of peace- 
loving people everywhere. If more na- 
tions were as responsible in their inter- 
national community as Fiji, it would be a 
far better world. 

The Fijian people's sense of decency 
in the conduct of international affairs 
has been expressed on many occasions 
in recent years, and we, again, have 
found ourselves standing shoulder to 
shoulder. In our condemnation of the 
brutal invasion of Afghanistan and the 
deliberate shooting down of a civilian 
Korean airliner. Americans also deeply 
appreciate your support of our efforts to 
rescue our students and restore 
democracy to the people of Grenada. 

And I've enjoyed this opportunity to 
get to know Prime Minister Ratu Mara. 
He is a man to look up to in many ways. 
Oxford-educated and deeply religious, a 
man of conviction and wisdom, he has 
provided exemplary leadership for his 
people in the crucial beginning stages of 
democracy. His support of free enter- 
prise and a market economy has enabled 
his people to enjoy stable economic prog- 
ress. He has kept Fiji on a steady course 

and has always defended the principles 
on which this country was founded, prin- 
ciples that we Americans share. I'm par- 
ticularly grateful for the sense of 
responsibility that he has demonstrated 
in the area of regional security. Having 
weighed his legitimate concern over 
nuclear issues against the defense needs 
of his country and the Oceania region, in 
1983 Prime Minister Ratu Mara re- 
opened Fiji's ports to all our American 
naval vessels. 

I know that such decisions are not 
easy and reflect a high degree of 
political courage. I applaud your states- 
manship, Mr. Prime Minister. 

I have thoroughly enjoyed our ex- 
change of ideas today. The Prime 
Minister taught me the meaning of do- 
ing things the "Pacific way." He 
represents a vital and dynamic way, he 
represents an area of the world that is 
becoming increasingly important to the 
United States. We want to work more 
closely with the people of Fiji and 
Oceania to help their region continue on 
a course of stable economic progress and 
democratic government, free from inter- 
national tensions and rivalries. 

We seek cooperation and improved 
relations for the betterment of all our 
peoples. The Prime Minister's visit has 
been a significant step forward. For this 
visit, and for sharing your insights, I 
give you my heartfelt thanks: vinaka. I 
look forward to working closely with 
you in the future and the people of the 
United States wish you and your Wife a 
pleasant visit in the United States and a 
safe journey home. Nisa moce. 

Prime Minister Mara 

I'm very pleased, indeed, that it has 
been possible for you to find time in 
your busy schedule to meet me on this 
occasion and soon after your re-election 
to the Presidency. This is an indication 
of the warm ties of friendship between 
our two countries. 

Our meetings and discussion this 
morning has brought our relationship 
onto a new and exciting level. There is 
now much greater understanding and 
appreciation of each other's views and 
aspirations. Our two countries have 
stood together for those common prin- 
ciples of justice, freedom, and fair play. 

Fiji was used as a transit base for 
the American troops in the South Pacific 
during the Second World War. Our men 
fought side by side in the Pacific war in 
defense of our respective ways of life 
and shared values. Like your country, 
we stand for peace and appreciate deter- 
mination to maintain peace and security 


Department of State Bulletin 


We believe in peace and we are 
ready to play our part in order to 
demonstrate that belief. That is why we 
are involved in UNIF1L, [UN Interim 
Force in Lebanon] and the multinational 
force and observers in Sinai. But as a 
small island nation and like others in the 
South Pacific and elsewhere, we look to 
you and your country for support and 
guidance in many of our endeavors. 

This outlook is both sensible and 
logical in view of your vast size and 
what appears to us to be a country of 
unlimited resource. Moreover there is a 
basic similarity and broadly common 
origin of many of our economic and 
political institutions. All these go to help 
our people feel at home in each other's 
company and make dialogue and com- 
munication between our two countries 
meaningful and enjoyable. 

Many young men and women from 
your country gave us loyal and devoted 
service through the Peace Corps. They 
worked with us at different levels of our 
administration and with our people in 
rural areas. Your South Pacific AID 
[Agency for International Development] 
program has been of considerable 
assistance to the development activities 
of the Fiji Government, voluntary 
organizations, and regional institutions 
in our country. 

We are confident that your assist- 
ance will continue in the future, because 
we believe that you see it as part of 
your overall responsibility in our part of 
the world. And this is an effective 
guarantee for peace and stability in our 

Our meeting this morning gives us 
confidence that our relations will grow 
from strength to strength in the in- 
terests of both our countries and our 

Fiji— A Profile 

■Made at the South Portico of the White 
House (text from Weekly Compilation of 
Presidential Documents of Dec. 3. 1984). ■ 


Noun and adjective: Fijian(s). Population 
(1983): 676,000. Annual growth rate (1981): 
1.9%. Ethnic groups: Indians 50%, Fijians 
45%, Europeans, other Pacific Islanders, 
overseas Chinese. Religions: Christian, Hin- 
du, Muslim. Languages: English (official), 
Fijian, Hindustani. Education: Attendance — 
95% (6-13 yrs.). Literacy— 75%. Health: In- 
fant mortality rate — 29/1,000. Life expectan- 
cy— 72 yrs. 


Area: 18,376 sq. km. (7,055 sq. mi.); about 
the size of Massachusetts. Cities: Capital — 
Suva (pop. 65,000). Other cities — Lautoka, 
Nadi, Labasa, Ba, Nausori. Terrain: Varied. 
Climate: Tropical maritime. 


Type: Parliamentary democracy. Independ- 
ence: October 10, 1970. Constitution: Oc- 
tober 10, 1970. 

Branches: Executive — British monarch 
(chief of state), represented by a governor 
general; prime minister (head of 
government); cabinet. Legislative — bicameral 
Parliament (52-member elected House of 
Representatives, 22-member appointed 
Senate). Judicial — Supreme Court, Court of 
Appeals, Privy Council. 

Political parties: Alliance Party, Na- 
tional Federation Party, Fijian Nationalist 
Party, Western United Front. Suffrage: 
Universal adult. 

Administrative subdivisions: 4 divisions. 

Flag: Light blue with Union Jack in top 
left corner and Fijian coat of arms centered 
on right. 


GDP (1982): $1,185 billion. Annual growth 
rate (1979-82): 0.5%. Per capita income 
(1982): $1,852. Avg. inflation rate: 7%. 

Natural resources: Timber, fish, gold, 

Agriculture: Sugar, copra, bananas, 

Industry: Sugar refining, tourism, gold, 
lumber, small industries. 

Trade (1981): Exports— $280 million: 
sugar, copra. Imports — $562 million: 
manufactured goods 24%, machinery 20%, 
fuels 16%, foodstuffs 13.6%. Part- 
ners — Australia, New Zealand, Japan, UK, 
Singapore, US. 

Official exchange rate (1983): F$1-US$1, 
based on a basket of currencies. 

Economic aid received: Over the 
1978-81 period, aid accounted for 3.2% of 
government receipts as against 1.6% in 
1975-77. (These figures are extremely low 
for a developing country, however.) Principal 
bilateral aid donors — Australia ($11.5 
million, 1981), New Zealand ($3.8 million, 
1983), UK ($8.7 million, 1980). Multilateral 
aid sources — Asian Development Bank ($16.2 
million, 1982), UN Development Programme 
($1.4 million, 1980), EC ($4.1 million, 1980). 
US aid (1982)— $928,000. The US does not 
have a bilateral aid program in the South 
Pacific; the region-wide program channels 
development funds to governments and 
regional institutions through private and 
voluntary agencies on a cofinancing basis. 

Membership in International 

UN and several of its specialized agencies, 
South Pacific Forum, Commonwealth of Na- 
tions, Asian Development Bank, South 
Pacific Commission, South Pacific Bureau for 
Economic Cooperation (SPEC), associate 
member of Economic and Social Commission 
for Asia and the Pacific (ESCAP). A regional 
institution, the University of the South 
Pacific, is headquartered in Suva. 

Taken from the Background Notes of 
September 1983. published by the Bureau of 
Public Affairs. Department of State. Editor: 
Juanita Adams. ■ 


January 1985 



The U.S. and the Caribbean: 
Partners in Communication 

by Diana Lady Dougan 

Statement before the Caribbean 
Seminar on Space WARC [World Ad- 
ministrative Radio Conference on the 
Use of the Geostationary Satellite Orbit 
and the Planning of Space Services 
Utilizing It] and the Transborder Use of 
U.S. Domestic Satellites in Montego Bay. 
Jamaica, on October 2, 1984. 

Ambassador Dougan is Coordinator 
for International Communication and 
Information Policy. 

Let me begin by thanking our cohosts 
for inviting us to their lovely island. The 
warmth of Jamaica's climate, hospitality, 
and friendship are all well known in 
Washington. You are graced with a land 
of great physical beauty and blessed 
with a thriving democracy. The United 
States is proud to have Jamaica as a 
close friend and good neighbor— with 
close ties based on shared democratic 
principles, mutually profitable trade, and 
the personal bonds of friendship and kin- 

I wish to thank Minister Charles for 
his vision and insight and Prime 
Minister Seaga for his personal interest 
in having his country host this con- 
ference. We in the United States ap- 
plaud the leadership he has shown in 
promoting democracy, respect for 
human rights, and economic develop- 
ment throughout the Caribbean. His 
strong support was immeasurably 
helpful in launching President Reagan's 
Caribbean Basin Initiative. 

While I am not here today to talk 
politics, I would like to comment briefly 
on the subject of U.S.-Caribbean rela- 
tions. The political and economic 
destinies of the United States and its 
Latin American and Caribbean 
neighbors are inextricably linked. We 
must progress together or not at all. 

Central America is frequently in the 
headlines because there is trouble there. 
But that must not obscure a fundamen- 
tal point: we have not forgotten the 
Caribbean. The commitment of this Ad- 
ministration to the entire Caribbean 
Basin is deep and long term. We seek to 
promote sustained economic develop- 
ment; to strengthen democratic institu- 
tions; and to encourage social reform 
and progress throughout the region. 
That is why we launched the Caribbean 
Basin Initiative, theCBI. 

When we say CBI, many think of a 
one-way, duty-free trade program over a 
12-year period. But the CBI is much 
more than trade legislation. The CBI in- 
cludes other forms of economic ini- 
tiatives which are tailored to the 
specialness of the Caribbean. For exam- 
ple, its provision to allow businesses to 
treat convention expenditures in the 
Caribbean as tax deductible expen- 
ditures holds the promise of increased 
tourist revenues for many of your coun- 
tries. Moreover, the CBI heralds signifi- 
cant and long-term increases in U.S. 
assistance. Our $372-million fiscal year 
1985 assistance program for the Carib- 
bean represents an increase of 40% over 
1983 funding and is three times the size 
of our program in 1979. 

Thus, the CBI represents a milestone 
in our relationship with you. It offers an 
unprecedented and comprehensive effort 
to work toward rapid economic and 
social development. It opens up new op- 
portunities for investment, employment, 
and trade. It is aimed at nurturing long- 
term growth, not dependence. 

Our meeting here in the Caribbean 
with our Caribbean friends is a part of 
this initiative. 

Challenge and Opportunity 

Together we share many goals and face 
many mutual challenges and oppor- 
tunities. Certainly one of the greatest 
areas of opportunity for all nations is in 
telecommunications. As neighbors and 
friends it is all the more vital that we 
have frank discussions and ongoing 
working relationships. International 
organizations such as the ITU [Interna- 
tional Telecommunications Union] and 
INTELSAT [International Telecom- 
munications Satellite Organization] pro- 
vide effective mechanisms for dealing 
with many concerns, but they can never 
be a substitute for our country-to- 
country considerations. Further, the ef- 
fectiveness of international organizations 
is increasingly dependent on early 
bilateral consultations. A good case in 
point was last winter's World Ad- 
ministrative Radio Conference on High 
Frequency Broadcasting. 

In 1983 the United States consulted 
bilaterally with a number of nations 
before this conference. By taking the 
time early — long before the actual ITU 
negotiations began, explaining our posi- 
tions, answering questions, and infor- 

mally discussing ideas while they were 
still at a formative stage, we found na- 
tions had time to think about and re- 
spond constructively to complex pro- 
posals. Too often country positions 
become brittle if sprung suddenly in the 
pressure cooker atmosphere of an inter- 
national conference. We believe these 
early consultations were key to the suc- 
cessful outcome of the conference, which 
dealt pragmatically and thoughtfully 
with the concerns raised by high- 
frequency broadcast issues. 

During the waning days of that con- 
ference, Mr. Phillip Cross of Jamaica 
proposed that the United States engage 
in regular consultations with the nations 
of the Caribbean. This seminar is in 
large measure the result of his proposal. 
We have established here today a spirit 
of frankness, informality, and innova- 
tion. Collectively, we can better under- 
stand and deal with the complexities of 
today's telecommunications oppor- 

In the next 3 days we hope to share 
with you some of the challenges and 
changes taking place in our country and 
hear your concerns and your reactions 
to our proposals and to react to your 

The process by which the U.S. 
Government develops the positions it 
takes at international conferences is 
long, complex, and arduous because of 
the primacy we place on the private sec- 
tor as well as the diverse expertise and 
perspectives of the numerous U.S. 
Government agencies which contribute 
to our policy process. The key agencies 
are represented here at this meeting. 

The sooner we learn about your con- 
cerns and your needs, the more effec- 
tively we can factor them into our re- 
sponses and our policies. In doing so, my 
U.S. colleagues and I come with no illu- 
sions that we are the fountain of 
knowledge; we have information and 
perspectives to share but also plenty of 
questions to ask. 

Distinguished colleagues, we are liv- 
ing in what may have correctly been 
pegged as the "information society." 
Futurist John Naisbitt pegs the transi- 
tion from the industrial society to the in- 
formation society at about 1956 when 
the first transatlantic cable was laid, 
white-collar workers began to out- 
number their blue-collar colleagues in 
the United States, and the Russians 
launched Sputnik. The real importance 
of Sputnik, according to Naisbitt, was 
not that it began the space age but that 
it inaugurated the era of global satellite 
communications. Similarly, the launching 
of the U.S. space shuttle Columbia in 


Department of State Bulletin 


i;»s i was far more important to the in- 
formation age than to the Future of 
space exploration. Before the spare 
shuttle, the complex parts of a satellite 

system had to be in the ground station. 
Now larger satellites will incorporate 

those functions and ground stations will 
fit on the rooftop of your house. And in 
little more than a decade, orbital slots 
will give way to the concern for the in- 
creased economies and effectiveness of 
space platforms if, of course, one allows 
technology to grow, not be boxed in by 
rigid planning or preconceived notions of 
what we as countries will need or want 
a decade from now. 

Satellites, coupled with the awesome 
growth of computer power and cable 
systems, have spawned a worldwide 
telecommunications industry whose 1980 
sales ran to $40 billion. That could 
double by 1990 and double again to $160 
billion by the turn of the century. That 
is larger than the gross national product 
of the United States in 1942. Telecom- 
munications has been the fastest grow- 
ing industry in the world every year for 
the last 10 years. Futurists predict it 
will be the largest single industry in the 
world. It has already touched and 
changed the lives of all of us here and 
increasinglv that of every person on 

Communications has always required 
a sender, a receiver, and a communica- 
tions channel. Increasingly sophisticated 
information technology — television, 
cable, satellites, and the computer — has 
revolutionized that simple process. The 
net effect of this faster information flow 
is to bring the sender and receiver closer 
together. The tyranny of geography and 
distance is losing its meaning. To each 
of our countries, large and small which 
are separated by water, satellite com- 
munication has added importance and 

Unfortunately, our thinking, our at- 
titudes, and consequently our decision- 
making have not caught up with the 
technology. But that is not surprising. 
We are being forced to reconceptualize 
our national and global objectives to fit 
the new economics of information. When 
we studied economics, we learned that 
capital was the strategic resource. In an 
information age, with information the 
strategic resource, access to the 
economic system is much easier. 

The new source of power is not 
money in the hands of a few but infor- 
mation in the hands of many. 

This new age is brain intensive not 
capital intensive. It is providing oppor- 
tunities for diverse individuals and na- 
tions to get in on the ground floor of the 
world of the future. 

Access to computer information 

hanks and high-speed data flows can 
make an enterprise m Nassau as com- 
petitive as one in Los Angeles or 
Sydney. A banana grower near Port An- 
tonio can call up any article from the 
National Agricultural Library in 
Washington. A doctor in Curacao can 
compare his diagnosis with case histories 
in Chicago. A professor at the Universi- 
ty of the West Indies has access to hun- 
dreds of abstracts and data banks all 
over the world. You don't have to live in 
New York to play the stock market or 
London to trade with Lloyds. Through 
technology, the world is shrinking in 
distance and expanding in opportunities. 

While the scientists are carving up 
microchips into increasingly thin wafers, 
it is up to us to make sure that we don't 
carve up the market for telecommunica- 
tions services and products in the same 
way or fence in the new technologies. 
Politicians and regulators aren't com- 
fortable with things they can't pin down 
and classify. Above all they crave order 
and predictability. Since they can't stop 
technical progress, they are often 
tempted to create regulatory regimes 
that will give them time to stop, take a 
breather, and try to figure out where to 
go from here. 

Of course, the regulators have a dif- 
ficult job. As a reminder of just how dif- 
ficult, remember that when the 
American Congress passed the Com- 
munications Satellite Act of 1962, 
authorizing the United States to 
establish COMSAT [Communications 
Satellite Corporation] and develop inter- 
national satellite services, there was no 
consideration given to the use of syn- 
chronous satellites. The technology con- 
sisted of random-orbit satellites, like 
Telestar. Synchronous satellites were 
not even contemplated in the near 
future. Yet, less than 2 years later, we 
put the first geosynchronous satellite in 
orbit and exponentially expanded the 
horizon for communications via satel- 
lite — so much for our ability to predict 
what technology will bring. 

I believe we would do well to take a 
piece of advice tendered by the White 
House to the Federal Communications 
Commission in 1970 when it was trying 
to decide whether a proposal by ABC 
television to relay television programs to 
its affiliates through the country by 
domestic satellite was technically and 
economically feasible. With a dose of 
modesty and common sense, presidential 
assistant Peter Flannigan warned that: 

... in a time of rapid technological, 

economic, and social change, we would be ill 

advised to adopt a policy without the flexibili- 
ty for future reviews or to adopt an overly 
restrictive policy simply because of our in- 
ability to predict future development. 

That sounds like sound advice to me; 
flexibility, adaptability, and nonrestric- 
tiveness is my perspective of sound 
policy formation. 

U.S. -Caribbean Cooperation 
in Communications 

Let us now turn to some of the specifics 
which bring us together today. Outside 
the United States, no place in the world 
is better situated than the Caribbean to 
take advantage of the opportunities 
which satellites and computer tech- 
nologies provide. 

The new source of power 
is not money in the hands 
of a few but information 
in the hands of many. 

Because of the irregular shape of 
the United States and the location of 
geostationary orbits, the footprint or 
coverage area of U.S. domestic broad- 
cast satellites will cover the Caribbean. 
This allows your nations to benefit from 
that coverage if you choose to do so. 

In addition to its advantageous prox- 
imity to the world's largest market, 
most of the Caribbean shares a common 
language with the United States. While 
I'm thinking mainly of English, Spanish 
is fast becoming our second language. In 
fact, with over 14.6 million people of 
Hispanic descent, the United States is 
well on its way to becoming one of the 
largest Spanish-speaking countries in 
the world. 

Geography, language, and privileged 
access to the U.S. market all make the 
Caribbean a prime choice for invest- 
ment. In fact, I noticed recently an 
advertisement in the Wall Street Jour- 
nal promoting Barbados as a prime loca- 
tion for doing international business. A 
modern communications network was 
one of five advantages listed. With the 
political and economic stability, a large 
literate workforce, and close proximity 

January 1985 



to the American market, the Caribbean 
can be a magnet for growth industries 
such as off-shore banking and the com- 
puter services industry. In our 
information-oriented society, access to 
efficient communications links is increas- 
ingly central in attracting investors, con- 
ventioneers, and tourists. People may 
sometimes claim that they would love to 
get away from the telephone for a little 
while, but don't take them too seriously. 

This Caribbean conference focuses 
on two of the most important links in 

Transborder Satellite Service. I 

would like to briefly reemphasize some 
key considerations on behalf of my 

• The United States is proud of its 
instrumental role in the creation of 
INTELSAT and continues to be firmly 
committed to protecting the economic 
and technical viability of the INTELSAT 
system in carrying out its vital mission 
of providing a basic global telecom- 
munications service. 

• The advent of regional systems 
and INMARSAT [International Maritime 
Satellite Organization] highlight the 
recognition that systems outside 
INTELSAT provide important oppor- 
tunities for expanding the economic effi- 
ciencies and varieties of satellite services 
and markets. 

• Incidental coverage of U.S. 
domestic satellites is a technological fact 
and opportunity for neighboring coun- 

• In addition to entering into the 
coordination process with the IFRB [In- 
ternational Frequency Registration 
Board] and INTELSAT, countries have 
responsibility to respect the copy- 
right/intellectual property rights of the 
senders of programs and data. 

• Coordination should be designed 
to promote efficiencv, not obstruct new 
entrants to the field" INTELSAT coor- 
dination is becoming costly and time 
consuming. It should not be necessary to 
repeat the process for each satellite, 

• . ice, or country. 

• The United States respects the 
righl of each country to regulate its own 

communications industry. But such 
decisions should be made by sovereign 
nations and should not be delegated to, 
or worst-, expropriated by international 

We will not impose our own 
preferences on others but believe that 
opportunities are at hand that should be 
easily acccessible to you if and when you 
care to use them. 

Space WARC. Transborder satellite 
questions are high on our agendas now, 
but even more far-reaching decisions 
regarding satellite communications 
systems are ahead. The World Adminis- 
trative Radio Conference will grapple 
with some of these issues next year in 
what we quaintly call Space WARC. The 
United States is vitally interested in this 
conference, a viewpoint which I know 
you share. How we manage the geosta- 
tionary orbit will have a significant im- 
pact on the future of the telecommunica- 
tions industry and, by extension, of 
those industries which depend on tele- 

We in the United States are making 
a major effort to formulate policies 
which will respond both to our national 
needs and to those of the larger com- 
munity of nations. To this end, we have 
formed a small policy group, coordinated 
by my office, which is made up of in- 
dividuals from key government agencies 
and from the private sector, to take the 
lead in the planning process for the 1985 
Space WARC session. This policy group, 
which is well represented here, is in the 
process of identifying the principles 
which we believe should govern our ef- 
forts in preparation for Space WARC. I 
believe early discussions and candid ex- 
change of views with other countries 
such as yours are vital. 

There are a number of tough ques- 
tions which we must collectively answer: 

• How do we guarantee, in practice, 
-quitable access for all countries to the 
geostationary orbit? 

• Is there a solution, short of a 
wasteful a priori planning method which 
can be devised to provide a "guarantee 
in practice?" 

• What, if any, planning methods 
can be devised to nurture, not restrict, 
the orbit's ability to meet the re- 
quirements of all countries? 

I assure you that in attempting to 
answer these questions the United 
States appreciates the concerns which 
have given rise to this conference. 
Every nation should be able to have 
assurance that, when it is ready to use 
the resource represented by the geosta- 
tionary orbit, it will receive equitable ac- 
cess. But we also believe it must be ac- 
complished in a manner which will not 
stifle the continued development of the 
very technology which will make the 
geostationary orbit more usable and 
useful to all nations in the decades to 

The United States has some 
preliminary ideas about how to address 
these issues. We need your reaction to 
our ideas and to hear your own pro- 


In closing, I would like to share with you 
the basic objectives of the United States 
in this overall policy area. As Secretary 
Shultz has succinctly stated, our 
policy is: 

... to promote an environment in which 
ideas and information can flow more freely 
among nations, to support the advancement 
of international commerce through the effi- 
cient and innovative use of communications 
resources, and to expand information access 
and communications capabilities of developing 
countries. The first objective is fundamental 
to the advancement of democratic institutions 
throughout the world; the second reflects the 
strategic contribution communications and 
computers make to the expansion of oppor- 
tunities for worldwide trade and investment; 
the third recognizes communications as an 
important catalyst for growth in developing 
countries. These objectives can be most effec- 
tively achieved by relying whenever possible 
on free enterprise, competition, and free 
trade, with a minimum of direct government 
involvement or regulation. 

We respect the fact that other na- 
tions have their own policies and own 
means of achieving them. However, by 
working together and understanding the 
practical effects of one another's policies 
and goals, we can meet collectively the 
challenges which the heavens and the 
future hold. ■ 


Department of State Bulletin 


Commercialization of Outer Space 

by Harry R. Marshall. Jr. 

Address before the International 

Astronaut i nil Federation and the Inter- 
national Institute of Spaa Law in 

Lausanne m October 9. 198J,. Mr. 
Marshall is I >,[>><!;/ Assistant Secretary 
for Oceans ami International En- 
vironmental and Scientific Affairs. 

From the beginning of our nation and, 
indeed, even from the inception of the 
United States as a colonial appendage of 
the 17th- and 18th-century British Em- 
pire, free enterprise and international 
commerce have been key elements in 
our economic growth and social better- 
ment. Since the beginning of the space 
age, it has been American private enter- 
prise—working in conjunction with U.S. 
Government agencies, primarily the Na- 
tional Aeronautics and Space Adminis- 
tration (NASA), the Department of 
Defense, and the National Oceanic and 
Atmospheric Administration— which has 
generated the enormous success of our 
unmanned and manned space programs. 
Now we believe the time has come for 
government to take some concrete ac- 
tion to promote the commercialization of 
space, such as: 

• Transferring ownership or 
management of government activities to 
commercial industries; 

• Expanding existing relationships 
between government and industry in 
space endeavors; 

• Freeing private enterprise from 
unnecessary government regulations; 

• Ensuring access to tax incentives 
available for other business sectors. 

This will permit the U.S. private sec- 
tor to directly employ and expand the 
skills and expertise it has already ap- 
plied in outer space. 

Presidential Space Program 

President Reagan, in his State of the 
Union message in January, enunciated 
three key elements of his space pro- 

First, he declared a U.S. commit- 
ment to build and put into orbit a per- 
manently manned space station during 
the next decade. The station would 
serve as a base for scientific and com- 
mercial activities which would benefit 
domestic and international interests 

January 1985 

Second, he called for renewed U.S. 
emphasis on international cooperation in 
outer space activities. Specifically, he in- 
vited our friends and allies to join in the 
space station project. 

Third, he called for an effort to en- 
courage U.S. industry to engage in com- 
mercial ventures in outer space. In this 
connection, he pointed out that a 
primary governmental role will be to 
remove impediments to private sector 

Even prior to his State of the Union 
address, the President had moved to 
facilitate commercialization, notably with 
regard to the land remote-sensing 
satellite program and expendable launch 
vehicles; and since January of this year, 
the Administration has taken several 
specific steps to implement its space 
commercialization policy. My remarks 
will focus on these developments in the 
United States and comment on their in- 
ternational ramifications. 

Landsat Commercialization 

Administration Efforts. For the past 
19 months, we have carefully planned 
the potential transfer of the civil land 
remote-sensing satellite program — 
Landsat — to the private sector by com- 
petitive process. 

In February 1983, President Reagan 
authorized this effort, and Secretary of 
Commerce Malcolm Baldrige promptly 
established an interagency policy-level 
group to oversee this initiative — the In- 
teragency Board on Civil Operational 
Earth-Observing Satellite Systems 
(IB-COESS). The IB-COESS was to set 
the policy framework for the formal re- 
quest for proposals to acquire Landsat. 
A Source Evaluation Board was estab- 
lished to issue the request for proposals, 
evaluate the proposals submitted, and 
report findings to the Secretary of Com- 
merce, who could then select a suc- 
cessful offeror. 

The IB-COESS and the Source 
Evaluation Board included represent- 
atives from interested government agen- 
cies, including the Departments of Com- 
merce, State, and Defense and the 
National Aeronautics and Space Ad- 

The request for proposals, as ap- 
proved by the IB-COESS, clearly 
stipulated that any proposal, if it were 
to be accepted, must meet certain well- 
defined national security and foreign 

policy requirements. Seven proposals 
were received by the March 10, 1984, 
closing date. The Source Evaluation 
Board reviewed the proposals and 
presented its findings and recommenda- 
tions to Secretary Baldrige this past 

The board found that three of the 
seven offerors were within competitive 
range. Subsequently, Secretary Baldrige 
authorized negotiations with two of 
them — Eastman Kodak Company and 
Earth Observing Satellite Company 
(EOSAT), a joint venture of Hughes Air- 
craft Company and RCA Corporation. 
The recommendation of Eastman Kodak 
regarding the financial conditions was 
rejected, leaving EOSAT— which has 
essentially completed its contract 
negotiations with the Department of 
Commerce — to take over operation of 
the existing Landsat system and provide 
a ground facility and two follow-on 
satellites. The arrangement is intended 
to cover a 10-year period, for which the 
government would pay $250 million. 
This figure would be separate and apart 
from what would be paid by the govern- 
ment for data. 

Legislation. As the Administration 
proceeded with its Landsat exercise, 
Congress was preparing the necessary 
legislative support to provide the 
framework for phased commercialization 
of land remote sensing. This ultimately 
emerged as the Land Remote Sensing 
Commercialization Act of 1984. Among 
the key international and foreign policy 
aspects of this legislation, which took ef- 
fect on July 17, 1984, are the following: 

• A finding that land remote sen- 
sing by the government or private par- 
ties involves international commitments 
which must be observed and a require- 
ment that a private operator observe 
and implement U.S. international obliga- 

• A provision that the Department 
of State provide guidance on all matters 
which affect international obligations 
and, in particular, determine those con- 
ditions for nongovernment remote- 
sensing activities which are necessary to 
meet the international obligations and 
foreign policy requirements of the 
United States; 

• A legislative requirement that a 
private operator of the existing Landsat 
system continue to provide foreign 
ground stations with unenhanced data in 
accordance with the terms of existing 
governmental agreements, but only for 
so long as the U.S. Government con- 
tinues as the actual owner of the 
remote-sensing system; 




• A finding that the private sec- 
tor—and, in particular, the "value- 
added" industry— is best suited to 
develop land remote-sensing data 
markets in the United States and 
abroad; and 

• An authorization to NASA to con- 
duct remote-sensing research with 
foreign governments and international 

Together, then, the Landsat com- 
mercialization initiative begun by the 
Administration and the congressional ac- 
tion provide the governmental 
framework to permit private commercial 
activity and innovation in taking over, 
developing, and operating a U.S. 
remote-sensing system consistent with 
international obligations. Most impor- 
tantly, from the international perspec- 
tive, the legislation provides the 
Secretary of State with the requisite 
authority for ensuring that private com- 
mercial Earth remote-sensing activities 
are conducted in strict accordance with 
the obligations of the United States 
under recognized international space 

As I mentioned, negotiations are 
essentially completed providing for the 
private sector operation of Landsat. Ac- 
cordingly, as required by the act, a 
report was submitted to the Congress on 
September 19 setting forth how the pro- 
spective operator would comply with the 
legislation. No conclusion of the contract 
can occur for 30 days from that date or 
unless the two congressional committees 
with oversight responsibility each pro- 
vide, at an earlier date, a written notice 
of nonobjection. 

In addition to providing for a follow- 
on remote-sensing system, the new 
legislation establishes a regulatory 
regime for the operation of remote- 
sensing satellites and data distribution 
by private entities, subject to U.S. 
jurisdiction. Jurisdiction under the new 
legislation would cover U.S. citizens or 
corporations operating a remote-sensing 
satellite. It would apply also to a U.S. 
parent corporation of a foreign sub- 
sidiary which operates a remote-sensing 

In the case of remote sensing, cer- 
tain governmental supervision is 
necessitated by virtue of international 
treaty obligations. As U.S. remote sen- 
sing heretofore has been undertaken by 
governmental agencies, this issue has 
not arisen until now. It is, of course, a 
matter which must be addressed not 
only in the United States but in any 
country where nongovernmental remote- 
ing operations are to be undertaken. 


The Department of Commerce is respon- 
sible, under the law, for licensing and is 
directed to promulgate appropriate 

Not much is known, at this time, 
regarding requirements other govern- 
ments may impose, other than what is 
stipulated by treaty requirements. 
France and Japan have near-term plans 
for deployment of remote-sensing 
satellites. The French company, Spot- 
Image, is seeking to market remote- 
sensing services internationally. It re- 
mains to be seen how international com- 
petition develops in this field. 

Expendable Launch Vehicle (ELV) 

Administration Efforts. The U.S. na- 
tional space policy of July 4, 1982, while 
identifying the NASA Space Transporta- 
tion System — the space shuttle — as the 
primary launch system for the U.S. 
Government, fully encouraged U.S. 
private sector investment and involve- 
ment in civil space activities. 

This spawned a keen private sector 
interest in continuing ELV systems and 
developing U.S. Government policy sup- 
port for commercial ELV activities. An 
increasing number of new enterprises 
has been established with the express 
purpose of developing commercial space 
launch capability. 

Within the Administration in 
Washington, the Senior Interagency 
Group on Space reviewed this matter 
and concluded that a U.S. commercial 
ELV capability would offer substantial 
benefits to the nation and would be con- 
sistent with the goals and objectives of 
the national space policy. The existence 
of a viable commercial ELV industry, it 
is believed, would add to the general 
economic vitality of the United States 
and provide the United States with a 
more robust space launch capability. 

The creation of a private ELV in- 
dustry would also maintain a high- 
technology industrial base. Further, it 
would provide jobs for thousands of 
workers, thus adding to the Federal tax 
base. Commercial ELV operations 
should spawn numerous spinoff and sup- 
porting activities and strengthen the 
U.S. position in what is projected to be a 
growing international commercial 

This would also reduce or eliminate 
U.S. Government closeout costs for 
discontinuing its ELV operations, and it 
would provide a potential market for ex- 
cess flight hardware, special-purpose 

tooling, and test equipment, as well as 
propellants. There would also be a 
market for U.S. Government facilities 
and equipment that would otherwise be 
underutilized or no longer required. 

On May 16, 1983, the President 
issued the U.S. policy on commercializa- 
tion of expendable launch vehicles, 
which states that the U.S. Government 
fully endorses and will facilitate com- 
mercial operations of expendable launch 
vehicles by the U.S. private sector. This 
policy applies to ELVs previously 
developed for U.S. Government use as 
well as to new launch systems developed 
specifically for commercial applications. 

The basic goals set forth in this 
space launch policy are to: 

• Ensure a flexible and robust U.S. 
launch posture to maintain space 
transportation leadership; 

• Optimize the management and 
operation of the Space Transportation 
System program to achieve routine, 
cost-effective access to space; 

• Exploit the unique attributes of 
the space shuttle to enhance the 
capabilities of the U.S. space program; 

• Encourage the U.S. private sector 
development of commercial launch 

Regarding implementation, the 
policy specifies that the U.S. Govern- 
ment will; 

• Endorse and facilitate the com- 
mercialization of U.S. expendable launch 

• License, supervise, and regulate 
U.S. commercial ELV operations only to 
the extent required to ensure compliance 
with treaties and other international 
agreements and with national and local 
laws and regulations, including those 
providing security, safety, and en- 
vironmental requirements; 

• Identify and make available, on a 
reimbursable basis, facilities, equipment, 
tooling, and services that are required to 
support the production and operation of 
U.S. commercial ELVs (such use would 
be subject to any governmental priority 
needs to meet critical mission or other 
national security requirements; however, 
all reasonable efforts will be made to 
minimize impacts on commercial opera- 

• Encourage the use of its national 
ranges for U.S. commercial ELV opera- 
tions where commercial launch opera- 
tions will be subject to minimum U.S. 
Government range regulations; 

Department of State Bulletin 


• Encourage free market competi- 
tion among the various systems and con- 
cepts within the U.S. private sector; 

• Not subsidize the commercializa- 
tion of ELVs but will price the use of its 
facilities, equipment, and services con- 
sistent with the goal oi' encouraging 
viable commercial ELV launch activities; 

• Provide equitable treatment for all 
commercial launch operators for the sale 
or lease of government equipment and 
facilities; and 

• Consider promptly requests for 
approval of proposed commercial launch 
facilities and ranges and. after approval, 
regulate subsequent operations con- 
ducted at or from such installations. 
(Near-term demonstrations or test 
flights of commercial launch vehicles 
conducted from private ranges will be 
reviewed for approval on a case-by-case 
and timely basis.) 

In parallel with its policy to en- 
courage and facilitate private sector 
ELV entry into the space launch 
market, the U.S. Government will con- 
tinue to make the space shuttle available 
to all authorized users— domestic and 
foreign— for commercial or civil govern- 
mental purposes. 

Through FY 1988. the price for use 
of the space shuttle will be maintained in 
accordance with the current pricing 
criteria. Beyond this period, it is the 
U.S. Government's intent to establish a 
full cost recovery policy for space shut- 
tle services for U.S. and foreign users. 

The ELV commercialization policy 
directive also established a separate 
working group to prepare a report that 

• Streamline the procedures used in 
the interim to implement existing licens- 
ing authority; 

• Develop and coordinate the re- 
quirements and processes for the licens- 
ing, supervision, and regulations ap- 
plicable to routine commercial launch 
operations from commercial ranges; and 

• Recommend the appropriate lead 
agency within the U.S. Government to 
be responsible for commercial launch ac- 

The working group submitted its 
report to the President on September 
15, 1983, and a few months later on 
November 16, 1983, the President 
designated the Department of Transpor- 
tation as the lead agency for the com- 
mercialization of expendable launch 
vehicles. Transportation Secretary 
Elizabeth Dole, in testimony before the 
House Subcommittee on Space Science 
and Applications of the Committee on 
Science and Technology on November 

January 1985 

IS. 19S3, provided the subcommittee 
with the Department of Transportation's 
approach to dealing with the new com- 
mercial ELV industry. 

Secretary Dole stated that the func- 
tion would be assigned to her office 
because of the significance placed on this 
responsibility by the President. She 
stressed the need for the U.S. Govern- 
ment to establish a climate that frees 
the industry from needless regulatory 
measures and allows it to grow and 

The President, on February 24, 
1984, issued an Executive order (E.O. 
12465) which officially designated the 
Department of Transportation as lead 
agency for facilitating and encouraging 
commercial ELV activities by U.S. 

The Department of Transportation 
envisions itself as a single agency man- 
dated to provide the commercial ELV 
industry with a single point of contact 
within the government — a contact which 
will not only coordinate and expedite ap- 
provals for launch but which will en- 
courage and promote the industry. The 
Transportation Department chairs an in- 
teragency review group, consisting of 
the Departments of State and Defense 
and other relevant agencies, which will 
determine the minimum essential data 
required for launch application and 
review and approve license applications 
in the areas of their responsibility. 

Congressional Action. Since 1981, 
a number of bills have been introduced 
in the U.S. Congress designed to pro- 
mote and encourage the U.S. private 
sector to provide launch vehicles and 
associated launch services for domestic 
as well as foreign customers. 

The House Committee on Science 
and Technology conducted hearings on 
House bill 3942, the Space Commer- 
cialization Act, which had been formally 
introduced on September 21, 1983. It 
was favorably reported to the House of 
Representatives and passed on June 5, 
1984. On the Senate side, Senate bill 
2931, the Commercial Space Launch 
Act, was introduced on August 9, 1984. 
The Senate Committee on Commerce, 
Science, and Transportation conducted 
hearings on September 6. At that time, 
the Administration announced its sup- 
port for such legislation. These bills 

• Promote economic growth and en- 
trepreneurial activity through utilization 
of the space environment for peaceful 

• Encourage the private sector to 
provide launch vehicles and associated 
launch services by simplifying and ex- 
pediting the issuance or necessary gov- 
ernment authorizations and by facilitat- 
ing the utilization of government- 
developed space technology and 
facilities; and 

• Designate the Department of 
Transportation to oversee and coor- 
dinate the conduct of launch operations, 
to issue and transfer launch licenses 
authorizing such activities, and to ensure 
that the public health and safety, foreign 
policy, and national security interests of 
the United States are satisfied. 

Let me comment on the foreign 
policy aspects of the ELV bills as they 
have passed the House and are being 
considered by the Senate. 

The findings and purposes of both 
bills highlight the need to satisfy U.S. 
foreign policy interests as part of the 
licensing process created. In satisfying 
this requirement, the Transportation 
Department as lead agency would con- 
sult with the State Department prior to 
issuing a license. Further, once a license 
is issued, the Department of Transporta- 
tion would have to take steps to prevent 
a launch of a payload or suspend any 
licensed operation if foreign policy in- 
terests would otherwise be jeopardized. 
This would be the case, for example, if a 
person subject to the legislation intended 
to launch a payload in violation of U.S. 
treaty obligations. 

With respect to the need to take 
foreign policy into account, the report 
accompanying the House bill is rather 
explicit. It notes that consultations will 
be continuous throughout the licensing 
process and that the Department of 
Transportation "should not act contrary 
to a national security or foreign policy 
determination made by another agency." 
I should note that this is reflective of 
the existing interagency deliberative 
process which has been utilized to date. 

Presently, regulation of the few 
private sector launches in the United 
States has occurred under ITAR— the 
International Traffic in Arms Regula- 
tions—promulgated under the Arms Ex- 
port Control Act (22 USC 2778; 22 CFR 
121.01 et seq.) and administered by the 
State Department's Office of Munitions 
Control. The State Department has 
agreed in recent months to have this 
regime administered by the Department 
of Transportation until an appropriate 
statutory scheme is enacted. It is an- 
ticipated that the Executive order 
designating the Transportation Depart- 
ment as the lead agency will be amended 




to effectuate this interim transfer. New 
legislation, as now being contemplated, 
would, in effect, supersede the applica- 
tion of ITAR for licensing launches of 
ELVs. Of course, ITAR would remain 
applicable for the actual export of ELV 
equipment or components for use 
abroad, such as at a foreign-based 
launch site. 

Both bills provide for monitoring of 
activities of licenses. As a condition of 
obtaining a license, a launch site 
operator must be prepared to permit ac- 
cess by U.S. Government officers. This 
practice, as applied to the launch of a 
foreign payload, would be tantamount to 
U.S. requirements now imposed by 
NASA in connection with the use of the 
space shuttle. 

The legislation has a very pragmatic 
approach with respect to extraterritorial 
jurisdiction. A U.S. citizen or corpora- 
tion would be required to obtain a 
license, whether launching or operating 
a launch site in the United States or 

With respect to a foreign corpora- 
tion controlled by U.S. interests (as 
defined in regulations to be promulgated 
by the Department of Commerce), no 
license would be required if the launch 
took place or if the site was operated in 
the territory of another country, unless 
there is an agreement with such country 
providing for U.S. jurisdiction in such 

If the launch or the launch site is 
not within the territorial jurisdiction of 
any nation (e.g.. on the high seas or in 
outer space), in that case the foreign 
subsidiary of a U.S. corporation would 
have to obtain a license, unless there is 
an agreement with the country in which 
the subsidiary is organized for such na- 
tion to assert jurisdiction over the 

Quite frankly, this approach is the 
result of much discussion on this issue in 
Washington, both in the Administration 
and Congress. The outcome appears to 
quite adequately balance the need for 
regulation by the responsible nation and 
the need to avoid excessive extrater- 
ritorial jurisdiction. 

There is an obvious overlap between 
the jurisdiction in the Land Remote Sen- 
sing Commercialization Act of 1984 and 
the ELV legislation. Although one 
regulates the operation of remote- 
sensing satellites and the other only the 
aspects of their actual launch, foreign 
payloads will be subject to the provision 

of the act, for example, if they are 
launched in the United States. Again, I 
would note that this is essentially no dif- 
ferent than the situation which now ex- 
ists when a foreign customer seeks ac- 
cess to the space shuttle. If there are 
any problems in this regard, let me say 
that we have a lot of pragmatic people 
in Washington who are concerned about 
this issue and who, I am sure, will find 
an acceptable solution. 

Conflicts of Law 

Having been talking about and alluding 
to extraterritorial jurisdiction, let me 
make some general remarks about con- 
flicts of law, because it certainly has 
relevance to outer space activities. 
When the outer space, liability, 
and registration conventions were 
negotiated, the commercial use of space 
was only a dream of a prophetic few. 
But already, in little more than a 
decade, that dream is a reality. Private 
parties can build and launch spacecraft, 
and they can and do go abroad to do so. 
When the nationals of one state engage 
in commercial operations abroad, issues 
arise concerning the assertion of 
jurisdiction by the national's state or, in 
some cases, concerning actual conflicts 
of law. 

Conflicts of law are going to happen 
in the interdependent world in which we 
live. The question is how to lessen the 
number of occurrences and mitigate 
them when they happen. 

The conflicts-of-law issue, which 
arises when two states undertake to 
regulate the same activity, is beginning 
to take on a degree of prominence in the 
management of outer space activities. 

In the outer space business, the 
issue comes about because of a number 
of governmental responsibilities, such as 
protection of the environment and public 
safety. Another reason is governmental 
responsibility for the actions of their na- 
tionals in outer space. And where 
governments think they have a respon- 
sibility, they are likely to impose regula- 
tions upon that activity. Where two 
governments think they have respon- 
sibility — or perhaps potential lia- 
bility—then both may impose regula- 
tions on the same activity. When that 
happens, a conflicts-of-law issue arises 
requiring resolution. Thus, the commer- 
cial use of outer space is one field where 
conflicts of law are bound to happen. 

The relevant outer space treaties im- 
pose responsibilities upon at least four 
different categories of states. The liabili- 
ty and registration conventions create 
responsibilities for: 

• A state which launches a space ob- 

• A state which procures a launch- 
ing of a space object; 

• A state from whose territory a 
space object is launched; and 

• A state from whose facility a 
space object is launched. 

Article VI of the Outer Space Treaty 
imposes a broader obligation on states 
by providing that: 

States Parties to the Treaty shall bear in- 
ternational responsibility for national ac- 
tivities in outer space. . .whether such ac- 
tivities are carried on by governmental agen- 
cies or by non-governmental entities. . . . 

Thus, arguably, a state is generally 
responsible for the activities of its na- 
tionals in space— whether or not the na- 
tional initiates or engages in these ac- 
tivities within the territorial jurisdiction 
of the state. 

As commercial use of space becomes 
a reality, our government must ask 
whether the U.S. Government is interna- 
tionally responsible under the relevant 
conventions if a U.S. corporation goes to 
a second country and launches a space 
object that results in injury in a third 
country. While the answer to this ques- 
tion would seem to be, "yes, there is 
responsibility," what if it is not a U.S. 
corporation but a foreign corporation, 
which is controlled by a U.S. company, 
that launches or procures the space ob- 
ject from foreign territory? 

In my view, I believe it is ap- 
propriate that the launching state must 
bear the brunt of responsibility, along 
with the state of nationality of the con- 
trolled foreign subsidiary. But there may 
be situations where there is no launching 
state, such as where the launch occurs 
on the high seas or from outer space. In 
the legislation I have mentioned, a U.S. 
license would be. required unless an 
agreement has been concluded under 
which another country is exercising ap- 
propriate regulatory control. 

We believe this policy approach is 
consistent with our treaty obligations 
and takes account of the interests of 
others. It should minimize conflicts and 
encourage coordinated use of outer 
space. The United States recognizes that 


Department of State Bulletin 


conflicts-of-law questions will still arise, 
and, consistent with our general policy 
on such subjects, we stand ready to seek 
cooperative solutions to such problems. 

Equitable International Competition 

Given the spirited international competi- 
tion in recent years between the space 
shuttle and the French Ariane expend- 
able launch vehicle, it is probably not 
surprising that attention of potential 
private ELV operators in the United 
States would focus on the conditions af- 
fecting their competitiveness in the in- 
ternational marketplace. On May 25, 
1984, one of those ELV operators, 
Transpace Carriers, Inc., filed a petition 
under Section 301 of the 1974 Trade Act 
alleging that the member states of the 
European Space Agency and their 
space-related instrumentalities are sub- 
sidizing the satellite launching services 
of the French company, Arianespace, 
S.A. The specific subsidy allegations in- 

• Two-tiered pricing of launch serv- 
ices, i.e., lower prices charged on serv- 
ices to the export market; 

• Provision of launch and range 
facilities, services, and personnel to 
Arianespace at unreasonably low cost; 

• Provision of administrative and/or 
technical personnel to Arianespace at 
unreasonably low rates; and 

• Subsidized mission insurance 

Transpace Carriers, Inc., claims that 
these subsidies have resulted in lost 
sales and suppression of bid prices. 

On July 10, 1984, the U.S. Trade 
Representative decided to accept the 
petition of Transpace Carriers, Inc., for 
investigation. The decision to accept its 
petition for investigation does not in any 
way prejudice the final outcome in the 
United States on this matter. Under the 
provisions of the Trade Act of 1974, the 
U.S. Trade Representative has 1 year— 
that is, until July 9, 1985— to investigate 
the allegations made in the petition and 
to complete consultations with govern- 
ments named in the petition. If the issue 
is not resolved before the end of the in- 
vestigation, the U.S. Trade Representa- 
tive must recommend to the President 
what, if any, action provided for in the 
Trade Act should be taken. The Presi- 
dent must make his decision within 21 

The United States requested con- 
sultations with European governments 
and European Space Agency officials on 
this matter. The timing and content of 
those consultations are being discussed 
in diplomatic channels. We are hopeful 
that it will be possible to begin these 
discussions soon, and we are optimistic 
that the results of those discussions will 
result in equitable competition in this 

Administration Initiatives 

As the Reagan Administration has 
moved to initiate specific steps to en- 
courage increased private commercial 
presence and activity in outer space, it 
has also begun vigorous evaluation of 
further initiatives that can be taken in 
the near future. 

As some of you may know, one of 
the President's earliest directives 
established a series of Cabinet councils 
to facilitate decisionmaking and policy 
formulation with respect to major issue 
areas. A working group of the Cabinet 
Council on Commerce and Trade was 
establishecl late last year to review 
industry-proposed initiatives designed to 
encourage commercial activity in space. 
Numerous meetings took place, includ- 
ing briefings by the industry. Ultimately, 
as announced in July, the Administra- 
tion has decided to take the following 
initiatives to facilitate the commercial 
use of space. 

• Consistent with Administration 
decisions on fundamental tax reform, 
revisions will be sought in tax laws 
which discriminate against commercial 
space ventures, for example: 

— The current "carry -on" test for 
the 25% research-and-development tax 
credit may be changed to allow corpora- 
tions engaged in a trade or business to 
form joint ventures and be eligible to 
use any such tax credits resulting from 
the venture. 

—The 10% investment tax credit 
and the accelerated cost-recovery system 
may be made available for space capital 
projects owned principally by U.S. in- 
terests and operated for domestic pur- 

— Prototypes used in outer space 
development may be made eligible for 
the research-and-development credit 
even though they eventually will be used 
in commercial service. 

• Long-term government contracts 
with new space ventures will be 
facilitated if the government has a need 
for the product and if the purchase 
would be cost efficient. 

• Tariff regulations could be clarifed 
to ensure that projects manufactured in 
space are not considered imports when 
returned to the United States. 

• Radio frequencies for private sec- 
tor use will continue to be assigned on a 
timely basis. 

• Additional protection of pro- 
prietary information should be provided. 

• Government agencies will take 
steps to assure fair international com- 
petition in outer space. 

• Current practices to increase 
private sector awareness of space oppor- 
tunities will be expanded, and increased 
industry investment in high-technology 
space-based research and development 
will be encouraged. 

• Various initiatives to implement 
national policy on the commercial use of 
space will be taken, such as increasing 
public awareness about the commercial 
opportunities in space and developing a 
plan for privatization of additional 
government space activities (beyond land 
remote sensing and expendable launch 

• High-level national focus for com- 
mercial space issues will be sought and 
implemented through the White House 
Working Group on the Commercial Use 
of Space. (The working group, to be 
chaired by the Department of Com- 
merce, will consist of all interested 
departments and agencies within the 
U.S. Government, including NASA and 
the Departments of State, Defense, 
Treasury, and Justice.) 

The above array of initiatives, and 
others that may be taken in the future, 
reflects a firm determination on the part 
of the Reagan Administration to en- 
courage and promote commercial outer 
space activities in order to benefit the 
domestic economy and reduce unneces- 
sary government expenditures. ■ 

January 1985 



Assassination of India's 
Prime Minister Gandhi 

Prime Minister Indira Gandhi of In- 
dia was assassinated outside her home 
by two Sikh members of her security 
guard and died a short time later in the 
All-India Institute of Medical Sciences 
on October 31, 1984. Secretary Shultz 
headed the U.S. delegation to Prime 
Minister Gandhi's funeral in New Delhi 
on November U- 

Following are statements made by 
President Reagan and Secretary Shultz 
on October 31, the Secretary's arrival 
statement in New Delhi on November 2 
and news conference on November 3. 

OCT. 31, 1984 1 

I want to express my shock, revulsion, 
and grief over the brutal assassination 
earlier today of Prime Minister Indira 
Gandhi of the Republic of India. The 
people of the United States join me in 
extending our deepest sympathy and 
condolences to the people of India and 
the Prime Minister's family as they 
mourn Mrs. Gandhi's death. 

As Prime Minister of the world's 
largest democracy and chairman of the 
Nonaligned Movement, Mrs. Gandhi was 
a source of global leadership. Her deter- 
mined efforts to promote peace, securi- 
ty, and economic development in South 
Asia and throughout the world will 
serve as a constant reminder of Mrs. 
Gandhi's commitment to protect the 
shared values of democratic nations. 

The Prime Minister and I had per- 
sonal correspondence recently regarding 
the scourge of terrorism. We agreed 
upon the necessity for freedom-loving 
states to strength our cooperation to 
stamp out this menace to humanity. 

Her senseless murder serves as a 
vivid reminder of the terrorist threat we 
all confront. We must, therefore, renew 
our determination to overcome this 
threat and ensure that Prime Minister 
Gandhi's accomplishments and memory 
will serve as an inspiration for 

OCT. 31, 1981 

The Government and people of the 
United States are shocked and outraged 
by the brutal assassination of Prime 

Minister Indira Gandhi, the leader of a 
great democracy, the Republic of India. 

Mrs. Gandhi served her country as 
Prime Minister for over 15 years and 
was also a major and powerful force in 
the world community through her 
dynamic role in global affairs, the 
Nonaligned Movement, the United Na- 
tions, and other forums. President 
Reagan and Prime Minister Gandhi 
shared a strong determination to con- 
tinue the struggle against terrorism. 

The United States denounces this 
despicable act which has taken the life of 
the Prime Minister and expresses its 
profound sympathy to the people of In- 
dia and Mrs. Gandhi's family for their 
tragic loss. 

NOV. 2, 1984 2 

This is a sad occasion for India, for the 
United States, and for men and women 
of good will throughout the world. In- 
dira Gandhi symbolized India: She spoke 
for India's commitment to a humane 
democracy, to a better life for all the 
people of India, and for peace and 
justice among all people. She won the 
respect of all, not the least that of my 
fellow Americans, as a good and wise 
leader. Thus she earned well her posi- 
tion as a world citizen of the first rank. 
We may be assured that her place in the 
history of our times is secure as it is 
secure in the hearts of her people. 

I speak for all Americans when I tell 
you how profoundly shocked we were by 
the brutal act of terrorism which has 
taken Indira Gandhi from us. It was an 
action which stands condemned by all 
civilized people. Terrorism, of which this 
is such a truly frightful example, has 
become the scourge of our times; it has 
touched the lives of all; we are dimin- 
ished by it wherever it occurs as we are 
diminished today by the murder of Mrs. 
Gandhi. Let us, I plead, rededicate 
ourselves to the task of ensuring that 
terrorism will not succeed in its deeply 
cruel disruptive purposes. 

India, the country that gave the 
word and thought of nonviolence to the 
world, knows well the hand of ter- 
ror — the hand that on the very morning 
of her independence struck down Mahat- 
ma Gandhi, the inspiration and true 
father of that independence. In the 

United States we have not been spared. 
Twenty-one years ago this month John 
F. Kennedy was struck down by an 
assassin's bullet. President Reagan 3 
years ago was the target of a mindless 
assassination attempt. But both India 
and the United States have shown the 
strength, resilience, and vibrancy of 
democracy in their time of crisis. And 
so, we know that the Indian people and 
their leaders, as did we in our days of 
trial, will have strength in their sadness 
and draw strength from their commit- 
ment to democracy. 

Your new Prime Minister has 
spoken of his mother's "dream of a 
united, peaceful, and prosperous India." 
He has called on his countrymen to com- 
plete her unfinished work. We know 
that the people of India will meet this 

Our two lands, the United States 
and India, have a firm and enduring 
relationship, one that is based on our 
common democratic heritage, our long 
history of a regarding association, our 
rich web of personal ties, our shared in- 
terest in an ever-expanding mutual sup- 
port and cooperation. The United States 
strongly supports the independence, uni- 
ty, and territorial integrity of India and 
recognizes its pivotal role in the region. 
We share the important goals of peace 
and stability both in South Asia and 
over all the globe. We look forward to 
working closely, productively, and in the 
highest of mutual regard with the new 
government of Prime Minister Rajiv 
Gandhi. We will do so as we did with the 
government of his great and distin- 
guished mother to whom our thoughts 
turn so strongly, so warmly on this 
tragic day. 

NOV. 3, 1984 3 

I'd like to ask the Majority Leader 
(Senator Baker) and Senator Moynihan 
to join me. We have made various 
statements during the course of our visit 
here, in particular at the conclusion of 
the meeting that we had with the Prime 
Minister, and I think those statements 
are intended to express our sympathy, 
our support and our respect for the in- 
dependence, integrity, and unity of In- 
dia; and, of course, our desire to have 
our relationships continue to improve 
and to see that whole side of our life ex- 
pand. I'd be glad to respond to your 
questions, or one of the Senators may. 

Q. Did Rajiv Gandhi accept the 
President's invitation to visit 
Washington next year? 


Department of State Bulletin 


A. He'll have to speak for himself on 
that. It was an imitation that 1 was able 
to extend, and obviously he is having to 
sort out his own situation. We agreed 
that in principle he would. He said he 
would certainly want to come, but as to 
just when and so forth, we'll have to 
sort out through diplomatic channels, 
and we'll proceed to do that. 

Q. Can you tell us what happened 
to the hoped for meeting with Prime 
Minister Tikhonov? 

A. We just had it. 

Q. Could you tell us about it? 

A. I considered it a good meeting. 
We touched on a number of things but 
most principally the desire of the United 
States for a constructive relationship 
with the Soviet Union, and I think I can 
fairly say that he expressed similar sen- 
timents from the Soviet side. 

Q. Was there any discussion of the 
Soviet press hints that Moscow 
believes or is accusing the United 
States of some kind of involvement in 
the events in India over the past 
several days? 

A. We certainly brought it up 
forcefully, and he said that he had 
looked into it and that the Soviet Union 
had no such view. 

Q. W^as there any conversation, 
any discussion or anything that might 
be taken as a step closer to the 
resumption of either arms talks or any 
other type of contacts of that nature? 

A. No, it was a very brief meeting, 
and I think that about all that one could 
say was the general intent, and I think 
that was certainly positive. 

Q. Let me followup. Was there any 
specific message from President 
Reagan that you took to him perhaps 
to take back to the Kremlin? 

A. Only the general statement of the 
President of his desire for a constructive 
relationship as expressed to Mr. 
Gromyko during Mr. Gromyko's visit. 

Q. If he said the Soviet Union had 
no such view of the United States' in- 
volvement in events or assassination 
here, how did you explain that in view 
of the views which did come out of 
the Soviet Union via TASS itself? 

A. He suggested that I was wrong 
in saying that they came out of the 
Soviet Union. 

Q. Would you tell something on 
some other meetings you are having 
later here? 

A. But. of course, we came here 
with the very distinguished delegation of 
particularly distinguished former am- 
bassadors. I don't want to downgrade 
the U.S. Senate or the Secretary of 
State, but I think Ambassadors Cooper, 
Galbraith, Goheen, and Moynihan con- 
stituted a group of people representing 
the long history of interest by very 
prominent Americans in India, and we 
came here to pay our respects and to ex- 
press our sympathy and give her our 
support and confidence in democracy in 
India. So I think that was the main 
point of visit here. 

It so happened that we have had 
some meetings with others than those in 
the country we are visiting. We had a 
number of meetings with prominent In- 
dians that we know, various members of 
the delegation. But in addition to 
meetings with Indians, I can count off 
who we were seeing. We are seeing the 
Soviets. I just mentioned the Chinese, I 
will have to leave in a minute or so or I 
will be late for the Sri Lankans, the 
British, the Pakistanis, the Japanese. I 
have seen a number of friends in walk- 
ing along through the corridors and so 

Q. Can you provide us with a little 
bit of analysis of the present political 
situation and events of this week? 

A. I don't think it's my place to do 
that. It's impressive that the Indians, in 
the wake of this shocking act of ter- 
rorism, have moved swiftly within the 
framework of constitutional democracy 
to identify the new Prime Minister, and 
I would have to say that in the meeting 
that I had with him he came through 
with a sort of quiet strength that I 
found very reassuring. 

Q. In the statement this morning, 
you said you reaffirm the United 
States' specific commitment to stabili- 
ty in this part of the world. I am 
wondering if, first of all, you see the 
instability that has occurred in India 
in terms of rioting as a threat to the 
stability in this part of the world? And 
second of all, if you got the impres- 
sion in your conversation with the 
new Prime Minister that the situation 
was becoming more under control and 
he was not overly concerned about it? 

A. We didn't dwell on the internal 
Indian situation. It's something for the 
Indians to deal with. I am sure that they 
will. As a matter of fact, so far as I can 
see, things have been settling down. I 
look forward to my own meeting with 
President Zia, and have chatted with 
him briefly it so happened since we sat 
next to each other in the bus going out 
to the cremation. But I will talk with 
him a little bit more later. I understand 
that he and the Prime Minister had quite 
a good talk. Of course, the great source 
of instability in this region is the Soviet 
presence in Afghanistan and the turmoil 
in that country. 

Q. Did Mr. Gandhi question U.S. 
aid/military aid to Pakistan and in 
that context, what assurances were 
you able to give him, particularly with 
respect to the Pakistan nuclear pro- 

A. He raised our relationships with 
Pakistan and particularly arms sales to 
Pakistan. From the standpoint of the 
United States, we wish to be good 
friends and good supporters of both In- 
dia and Pakistan. We would like to see 
all the moves that suggest the possibility 
of closer and better relationships be- 
tween these countries, and these are 
much applauded by us. And the positive 
statements, as I said, that seemed to 
come out of the talk between President 
Zia and the Prime Minister, I welcome. 

Insofar as our support for Pakistan 
is concerned, it does have a border with 
Afghanistan, from which a large number 
of refugees have come into Pakistan, 
around 3 million, and the presence of 
the Soviets in Afghanistan constitutes a 
definite threat to them. So it is with 
that in mind that we have given support 
to Pakistan. 

'Text from Weekly Compilation of 
Presidential Documents of Nov. 5, 1984. 
2 Press release 245 of Nov. 2, 1984. 
3 Press release 247 of Nov. 5, 1984. I 

January 1985 



Afghanistan Under the Soviets: Five Years 

The following paper was prepared by 
Craig Karp of the Bureau of Intelligence 
and Research in December 198U- 

On December 24, 1979, detachments of 
Soviet airborne troops began to land at 
Kabul, capital of Afghanistan. By 
December 27, the total of Soviet troops 
in Kabul had risen to 5,000. Under vary- 
ing pretexts, they disarmed many of the 
Afghan troops stationed in the capital. 
That night, Soviet forces stormed 
Darulaman Palace, residence of Presi- 
dent Hafizullah Amin. Afghan soldiers 
loyal to Amin, also chief of the People's 
Democratic Party of Afghanistan 
(PDPA), were overcome by the Soviet 
troops. At the same time, a transmitter 
across the border in the Soviet Union, 
claiming to be Radio Kabul, broadcast a 
taped announcement by Babrak Karmal, 
one of the founders of the PDPA, that 
Amin had been overthrown by a group 
of party members. 

A few hours later, the real Radio 
Kabul, seized by Soviet troops in a coor- 
dinated attack, began broadcasting in 
the name of the new "Afghan" regime. 
It proclaimed that Babrak Karmal had 
been named President of the Democratic 
Republic of Afghanistan (DRA). Shortly 
thereafter, it disclosed that President 
Amin had been tried and executed by a 
party tribunal. That same night Radio 
Kabul announced that the U.S.S.R. had 
accepted an urgent request from the 
Afghan Government for military 

Thousands of troops poured across 
the Amu Darya (Oxus River) from the 
southern U.S.S.R. into Afghanistan or 
flew into airfields under control of 
Soviet forces previously dispatched as 
advisers. The influx mounted until by 
early January 1980 there were 40,000 
Soviet soldiers in Afghanistan, rising to 
85,000 by that summer. They occupied 
all the major cities of the country, en- 
forcing the rule of the puppet Karmal 
regime on a land that has never long 
been held by foreign invaders. 


The U.S.S.R. undertook this invasion to 
contain a rapidly growing insurgency 
against the oppressive radical Marxist 
government of Amin. The countrywide 
movement threatened to end the rule of 
■a Marxist regime to which the Kremlin 
had become heavily committed and to 

put in power in Kabul a government un- 
controlled by and probably hostile to the 
Soviet Union. 

The Marxist leadership that the 
Soviets altered in December 1979 had 
come to power in an April 1978 coup 
that ousted and killed Prime Minister 
Mohammed Daoud. One of the early 
leaders of the Nonaligned Movement, 
adept at balancing East and West, 
Daoud himself had deposed his cousin, 
King Zaher Shah, in 1973. Shortly after 
the Saur (April) Revolution, the two fac- 
tions making up the PDPA split, and 
Babrak's Parcham group was purged by 
the Khalq faction of then Vice President 
Amin and President Noor Mohammed 
Taraki. In September 1979, following a 
Soviet-backed attempt to eliminate him 
in a shootout in the presidential palace, 
Amin declared himself president. The 
following month Kabul announced 
Taraki's death. 

The communists in Kabul alienated 
the Afghan people by their insensitive 
enforcement of social and economic 
"reforms," including a land redistribution 
program which encountered immediate 
and intense opposition. Dissent was met 
by brutal repression. 

Opposition to the communist govern- 
ment grew quickly and spontaneously 
throughout Afghanistan. Virtually all 
elements of the population were in- 
volved: Islamic fundamentalists who had 
already organized in opposition to the 
King and Daoud; parliamentary 
moderates; royalists loyal to Zaher 
Shah; army officers resentful of the 
growing role of Soviet military 
"advisers"; traditionalist and tribal 
elements angered by the regime's efforts 
to enforce its programs in areas where 
the central government's writ had never 
run large. These ethnic and tribal 
groups, which are the rural or nomadic 
majority of the population, form the 
core of the resistance. 

Military Situation 

Facing the mighty Red Army, one of the 
world's largest and most powerful, the 
prospects of a poorly armed insurgent 
movement seemed initially hopeless. 
Yet, after 5 years of Soviet occupation, 
the military situation in Afghanistan re- 
mains at a virtual impasse. The "limited 
contingent" that the Kremlin dispatched 
has not been enough to suppress the 
resistance of the Afghan people. 

Although the Afghans are not likely 
ever to be strong enough physically to 
expel the invader, the Soviets slowly, 
but steadily, have been compelled to in- 
crease their forces and firepower and 
continually reevaluate their tactics mere- 
ly to maintain their position. 

The Soviets and their Kabul allies 
are able to exercise effective control 
over only a small fraction of Afghani- 
stan. Except for sweep operations, they 
rarely venture away from their own 
bases, parts of the cities, and the major 
highways. At night, even these are not 
safe for them. Most of the country's 
rural areas remain beyond Soviet and 
regime control. The Afghan resistance 
fighters (mujahidin), on the other hand, 
are able to move throughout the country 
and exercise virtually full authority over 
wide areas. In some places they effec- 
tively govern, collect taxes, and run 

Soviet and Kabul regime efforts to 
establish control over the major cities 
and towns have met with only limited 
success. Maintaining security in Kabul is 
a priority for the government, but the 
city has increasingly been subject to 
resistance actions. Security in the capital 
deteriorated sharply in late 1984, when 
the mujahidin carried out a number of 
rocket attacks. Significant areas of 
Herat and Qandahar, the second and 
third largest cities, are under resistance 
control, and their populations have 
dwindled due to Soviet and regime bom- 

Resistance Capabilities. The 

mujahidin have been increasingly effec- 
tive throughout the 5 years since the in- 
vasion. Their armament has improved 
from traditional homemade rifles 
through nearly the full range of Soviet 
weaponry, much of it captured or 
handed over by deserters from the 
Afghan Army. As the war has worn on, 
they have acquired a capability to 
counter Soviet or regime aircraft, with 
antiaircraft guns and recently with some 
surface-to-air missiles. Although there 
are continued reports of disputes and 
even fighting between resistance groups, 
there also have been signs of increasing 
operational cooperation. 

Most importantly, despite extreme 
hardship and suffering, there is no sign 
that the resistance is losing the general 
support of the overwhelming majority of 


Department of State Bulletin 


Afghans. The Afghan people over the 
past 5 years have provided the >nu- 
jahidin with food, shelter, and recruits, 
and— in the case of many of those still 
working for the government or army- 
equipment, access, and inside informa- 

The DRA Army. The inability to 
maintain an effective Afghan military 
has been one of the most significant 
problems for the Kabul regime and for 
the Soviets in Afghanistan. The Afghan 
Army, which had some 90,000 men 
before 1979, has been reduced largely 
through desertion to around 35,000- 
40,000. Regular conscription is supple- 
mented by roving press gangs. The draft 
age has been lowered almost every year 
and recently dropped to 16. Such efforts 
themselves result in increased desertion 
rates, as in 1983 when the term of 
service was lengthened and already 
discharged veterans made subject to 
additional callup. The continued de- 
terioration of the Afghan Army has 
necessitated a greater reliance by 
Moscow on its own troops. 

Soviet Forces. The Soviet Union 
now has about 115,000 troops in 
Afghanistan (an increase of about 10,000 
from the number observed in 1983), who 
are supported by about 30,000-35,000 
troops stationed in the contiguous Cen- 
tral Asian region of the U.S.S.R. Theft 
and assault, abuse of alcohol and drugs, 
black marketeering, poor discipline, 
disease, and supply shortages caused 
partly by mujahidin interdiction have 
reduced effectiveness. The Red Army 
derives some benefit in training and 
equipment testing in its first real combat 
experience since World War II. 

Despite often low morale and the 
loss of 20,000-25,000 casualties (about 
one-third killed), Moscow appears deter- 
mined to remain in Afghanistan. At the 
same time, there has been no indication 
that the Soviet Union is at present 
ready to significantly expand its force 
commitment, and current strength is 
sufficient to thwart any forseeable at- 
tempt by the resistance to dislodge 

Because they cannot depend on 
Afghan Government troops, the Soviets 
have been forced to play an expanded 
role and to display a new aggressive- 
ness, as evidenced by their major opera- 
tion last spring in the Panjsher Valley. 
In their seventh attempt over the last 5 
years to take this strategic valley, they 
resorted to high-altitude saturation 
bombing by aircraft based in the Soviet 
Union and committed many thousands 

of their own troops. While they were 
able to reestablish control in the lower 
valley, they failed in their goal of 
eliminating the local resistance and its 
leader Ahmad Shah Masood. Masood 
had used a truce offered by the Soviets 
in 1983 to consolidate his forces and 
carry out operations outside the valley. 
Repeated regime claims to have killed 
Masood again proved untrue. The 
Soviets have pursued a scorched-earth 
policy in the Panjsher and destroyed 
most of the crops and irrigation net- 
works in the valley. 

Soviet counterinsurgency tactics 
have hit civilians as well as the mu- 
jahidin. For some time, Soviet planes 
were dropping antipersonnel mines 
disguised as toys, watches, and other ob- 
jects that Afghan children or refugees 
would pick up. These mines were de- 
signed to maim rather than kill. Fre- 
quent savage reprisals against villagers 
suspected of aiding the mujahidin fur- 
ther alienate the population against the 
Soviets and the regime. 

Chemical and Toxin Weapons. 

Evidence indicates that Soviet troops 
and their Afghan proxies have used 
lethal chemical and toxin weapons in 
Afghanistan. Attacks with such weapons 
on the mujahidin were reported as early 
as 6 months before the full-fledged 
Soviet invasion and continued up 
through 1982. Reports of chemical and 
toxin agents used include mycotoxins 
(poisons derived from natural biological 
sources), nerve gases, incapacitants, 
blister agents, carbon monoxide, and 
nonlethal gases delivered by a variety of 
means. Typical targets are mujahidin 
hiding in tunnels or in inaccessible 
mountain redoubts. Although there have 
been no confirmed incidents since 1982, 
there are recent indications that 
chemical agents are still being used. 

Political Situation 

Tainted by Soviet sponsorship, the Kar- 
mal regime has been no more successful 
in winning political backing from the 
Afghan people than its predecessor, in 
spite of major efforts to broaden its sup- 
port. The regime from its inception 
adopted a much more moderate ap- 
proach to social and economic change. 
When it eventually reintroduced land 
reform, it included exemptions for 
military, religious, and tribal leaders 
who support the regime. The govern- 
ment has attempted a reconciliation with 
religious leaders (mullahs). Babrak Kar- 
mal has even tried to portray himself as 
supportive of Islam. Public skepticism 

and religious opposition are fueled by 
regime efforts to control the faith, such 
as the late 1984 removal of 20 of Kabul's 
most prominent mullahs from their 

In December 1980 the regime, with 
much fanfare, announced the formation 
of the National Fatherland Front (NFF). 
Made up of tribal and religious leaders 
and representatives of PDPA-backed 
unions and social organizations, the 
NFF was designed to extend party in- 
fluence. Efforts to persuade nonparty 
members to join have not been suc- 
cessful. Aside from token participation 
in regime-sponsored conferences, most 
religious, tribal, and community leaders 
will have nothing to do with the Marxist 
government. Many, instead, are active in 
the resistance. 

The formation of the NFF was one 
of a series of Soviet-sponsored efforts to 
offset the devastating internecine con- 
flict between the Parcham and Khalq 
factions of the PDPA. The Soviets in- 
sisted on inclusion of Khalqis in the 
Cabinet and have attempted to rein in 
Parcham moves to extract vengeance 
for the oppression meted out to them 
when the Khalq was in power. These 
moves have born little fruit. Continued 
interparty strife has resulted in 
assassinations of members of both fac- 

Repression is also visited on those 
outside the regime. The Soviet-directed 
secret police (the KHAD), the police, and 
the army are reportedly responsible for 
torture, executions, and human rights 
violations of every description. Recently, 

Afghan Communist 

The Afghan communist party is called 
the People's Democratic Party of 
Afghanistan (PDPA). It is split into two 
groups, whose rivalry is often violent. 

The Parcham (Banner) faction, 

headed by President Babrak Karmal, is 
currently dominant. Parcham members 
hold the most high-level government and 
party positions. This faction is largely 
composed of upper- and middle-class, ur- 
ban, Dari-speaking intellectuals. 

The Khalq (Masses) faction was led 
by former Presidents Taraki and Amin 
and now by Interior Minister Gulabzoi. 
Khalqis tend to be of lower class, rural, 
Pashtun-speaking background. A prob- 
able majority of party members, they 
predominate in the police and military, 
which ensures continued survival of this 
dogmatic but more nationalistic group. 

January 1985 



in a speech to the security forces, even 
Karmal himself was moved to criticize 
them for being arbitrary and oppressive. 

Moreover, the Kabul government 
has given shelter and assistance to inter- 
national terrorists. When members of 
the al-Zulfiqar movement hijacked a 
Pakistan International Airlines jet and 
were welcomed in Kabul, international 
sanctions were imposed which bar 
Afghanistan's Ariana Airlines from land- 
ing in many countries. 


Economic conditions in Afghanistan— a 
landlocked country with little arable 
land, limited natural resources, and only 
rudimentary infrastructure— have 
always been precarious. Since the inva- 
sion, conditions have deteriorated. 
Agricultural production has dropped, 
causing food shortages in some areas 
and, for the cities, increased importation 
of foodgrains from the Soviet Union. 
Cultivators have fled the fighting, the 
draft, or to join the resistance. For 
those who remain, it is often too risky to 
go out into the fields. Due to input 
disruptions and mujahidin sabotage 
(since most industry is state owned), in- 
dustrial production also has declined. 

The only growing parts of the econ- 
omy are those linked to the Soviet 
Union, part of a concerted Soviet policy 

Major Afghan Resistance 

Resistance fighters inside Afghanistan 
generally are organized as local or tribal 
bands, confining their operations to a 
particular area. Many of these groups 
are affiliated with political parties most- 
ly headquartered in Peshawar, Pakistan. 
The major parties in Peshawar have 
formed two coalitions, often referred to 
as the fundamentalists and the 
moderates. The former group, led by 
Professor Abdul Rasool Sayyaf, is 
sometimes called the seven-party unity. 
It is composed of three major parties: 
Gulbuddin Hikmatyar's Hezb-e Islami; 
the Hezb-e Islami faction of Yunus 
Khalis; and the Jamiat-i-Islami headed 
by Burhanuddin Rabbani. The other 
coalition, also known as the three-party 
alliance, consists of: the Harakat-e- 
Inqelab of Nabi Mohammedi; the 
Mahaz-e MiUA of Fir Sayyid C-ilani; and 
tho Jebh < Nejat-e Milli led by Sibag- 
hatullah Mojadeddi. 

of fostering such ties. Natural gas, Af- 
ghanistan's major natural resource and 
export item, is piped directly from the 
ground into the U.S.S.R. at below world 
market prices. No distribution pipelines 
run to the Afghan cities. A major copper 
mining project is in the works to pro- 
duce copper for direct export to the 
Soviet Union. Outside the thriving black 
market, statistics show little trade with 
the noncommunist world. 


Partly as a result of increased military 
activity, refugees continue to leave 
Afghanistan, although at a reduced rate 
from earlier periods. Pakistan remains 
host to an estimated 2.5 million 
refugees, the largest refugee population 
in the world. An estimated 800,000 more 
Afghan refugees have fled to Iran. 

In addition to those who have left 
Afghanistan, an undetermined number 
have been displaced within the country 
itself as fighting and destruction have 
driven people into urban areas. Since 
the Soviet invasion, the Kabul popula- 
tion has doubled, despite the exodus of 
large numbers of urbanites from the 

Despite the heavy burden the 
refugee influx has placed on Pakistan, 
the refugees have been welcomed and 
generally good rapport continues be- 
tween them and their hosts. Pakistani 
assistance to the refugees includes cash 
allowances and payment of relief ad- 
ministration costs. 

The Government of Pakistan has 
asked the UN High Commissioner for 
Refugees (UNHCR) to undertake an in- 
ternational relief program for the 
refugees in Pakistan which includes 
basic food, housing, health care, and 
education. Contributions from several 
other countries and international volun- 
tary agencies have greatly assisted this 

Working through the UNHCR, the 
World Food Program, and a variety of 
voluntary agencies, the U.S. Govern- 
ment continues to share in the interna- 
tional assistance program. Since 1980, 
the United States has contributed more 
than $350 million to Afghan refugee 
relief. During fiscal year 1984, the 
United States contributed about $70 
million to support Afghan refugees in 
Pakistan, including $49 million through 
the World Food Program. The U.S. con- 
tribution represents some 35% of the 
total UNHCR budget and about 50% of 
the international food contribution. 

International Reactions 

The world reacted with shock and hor- 
ror at the Soviet invasion and the con- 
tinuing brutal war. The United States 
denounced the invasion and imposed a 
number of sanctions against the Soviet 
Union. The Organization of the Islamic 
Conference, demanding a Soviet pullout, 
voted to suspend Afghanistan's member- 
ship and called on its members not to 
recognize the Karmal regime. The 
Nonaligned Movement called for the 
withdrawal of all foreign forces. 

From the very beginning, the Kabul 
government has maintained with Soviet 
affirmation the position that the 
presence of Soviet troops is a bilateral 
matter. A troop withdrawal could be 
considered only after outside in- 
terference, i.e., the resistance, had 
ceased. The DRA proposals call for in- 
ternational guarantees of noninterfer- 
ence as part of any settlement. 

UN Negotiating Efforts 

In January 1980 the UN General 
Assembly condemned the Soviet inva- 
sion by an overwhelming vote. In 
November of that year, the General 
Assembly passed a resolution calling for 
the withdrawal of foreign forces from 
Afghanistan and calling on the 
Secretary General to seek a negotiated 
solution. A similar resolution has passed 
each succeeding year. In 1984 the 
resolution, sponsored by Pakistan and 
46 other nonaligned states, won a record 
vote of 119 to 20 with 14 abstentions. 
This wide margin reflects the continuing 
censure by the world community of the 
Soviet occupation of Afghanistan. 

The major elements of the General 
Assembly resolution provide the basis 
for a settlement and for the UN- 
sponsored negotiations. These are: 

• The complete withdrawal of all 
foreign troops; 

• The restoration of the inde- 
pendent and nonaligned status of 

• Self-determination for the Afghan 

• Return of the refugees with safety 
and honor. 

In 1981, negotiating efforts were 
begun by the Secretary General's "per- 
sonal representative" Javier Perez de 
Cuellar. When Perez de Cuellar himself 
became Secretary General, he appointed 
Under Secretary General Diego Gor- 
do vez to the position. 

Department of State Bulletin 


In June L982, after a series o( 
separate consultations, Pakistan and the 
Kabul government sent delegations to 
Geneva for indirecl talks led by Cor- 
dovez. Iran, which strongly condemns 
the Soviet occupation, did not directly 
participate because "the real represent- 
atives of Afghanistan" were not invited. 
but Iran agreed to be kept officially in- 
formed. The Soviet Union was kept 
unofficially informed. Although there 
were reports of "progress" and "flexibili- 
tv." no agreement was reached. The 
Geneva talks reconvened in April and 
June 1983 and in August 1984. Cordovez 
called the most recent meetings 
"technical." and although there was no 
apparent progress, both parties have 
agreed to meet again in February 1985. 

The United States fully supports the 
UN efforts to find a solution, based on 
the four principles of the General 
Assembly resolutions. 


The outlook for the immediate future of 
Afghanistan is grim, with the expecta- 
tion that the fighting will continue for 
the forseeable future. The Soviets seem 
intent on a long-term strategy based on 
maintaining the regime in Kabul, wear- 
ing down the resistance, and the 
sovietization of the Afghan Government, 
economy, society, and people. However, 
the mujahidin appear willing to pay the 
heavy cost of continuing their struggle, 
and they say they will not give up. 

Much will depend on the outside 
world, on attitudes toward the conflict 
in the bordering states and in the world 
at large. The goal of U.S. policy is a 
negotiated political settlement for 
Afghanistan which would get the Soviet 
forces out and end the agony of the 
Afghan people. ■ 

Afghanistan: Five Years 
of Tragedy 

Statement by Ambassador Jeane J. 
Kirkpa trick, CS. Permanent Repre- 
sentative to the I 'nihil Nat ions before the 
I X General Assembly on November Ik. 

Also included is the text of the 
General Assembly resolution adopted on 
November 15. 

The occupation of Afghanistan ap- 
proaches the end of its fifth year. In the 
succession of soecial sessions and 
debates, this General Assembly has time 
and again called for an end to the oc- 
cupation of this beautiful land of ancient 
caravans. Time and again, we have 
called for the withdrawal of invading 
forces, for the right of the people of 
Afghanistan to determine their own 
future. Yet even after 5 years and all 
these efforts, the situation remains vir- 
tually as it was in the first year of oc- 
cupation — a human disaster and a mili- 
tary impasse. For the Soviets, the war 
against the Afghanistan people, the 
Afghan nation, has now lasted longer 
than the Second World War, but still the 
Afghan people are not subjugated. 

So, after 5 long and difficult years, 
the struggle in Afghanistan continues. 
But we should not be too surprised at 
the will and determination of the Afghan 
people. Since at least the time of Alex- 
ander the Great, the Afghan people have 
demonstrated their extraordinary will- 
ingness to bear hardships and make 
sacrifices in long and bitter resistance 
against foreign invaders in all directions. 
They are, perhaps, the original national 
liberation movement in the true and 
most meaningful sense of that term. 
Their struggle to liberate their nation 
will go on. 

What has happened in Afghanistan 
during these 5 tragic years? The regime 
of Babrak Karmal — installed by the 
Soviet Union during the December 1979 
invasion, after another communist prime 
minister, Hafizullah Amin, and all his 
family had been killed — has remained 
unpopular, weak, divided within itself. It 
has been able neither to increase its sup- 
port throughout the country nor to win 
the allegiance of the Afghan people. 
When Babrak Karmal assumed the 
leadership of the government in Kabul, 
his strategy appeared to be to seek to 
gain public sympathy by blaming the 
evils endured by the Afghans on the 
previous government. Yet, he was in- 
creasingly rejected by the Afghan nation 

and its leaders personally. He also 
sought to reconcile the estranged Par- 
cham and Khalq factions within the Peo- 
ple's Democratic Party of Afghanistan, 
to institute conciliatory domestic 
policies, to release many political 
prisoners and ease political repression, 
to downplay the role of the Soviet 
Armed Forces and advisers, to strength- 
en the Afghan Army, and to lay the 
foundation for the transformation of the 
Afghan social and economic systems by 
sovietizing the Afghan educational 
system and sending Afghan exchange 
students to the Soviet Union for train- 
ing. The goal, it would appear, was a 
docile client state. 

What has happened in Afghanistan 
in the past 5 years? At the most general 
level, we may say that the goal of the 
occupying forces and of their puppet 
government has not been achieved, and 
few of the strategies of that government 
have had any success at all. Most have 
been total failures. Hostility to the 
regime of Babrak Karmal has grown 
rather than diminished. The overwhelm- 
ing majority of the Afghan people op- 
pose the alien system he seeks to im- 
pose. The tide of resistance continues to 

The People's Democratic Party of 
Afghanistan, the political facade behind 
which the Soviet Union attempts to ex- 
ercise political control, remains frac- 
tured. Political intimidation and assassi- 
nation remain facts of political life in 
Kabul, often blamed on the resistance in 
an effort to cover up the inability of the 
leadership of the party to bring the two 
factions together and to govern effec- 
tively. No matter what domestic policies 
are adopted, the Government of Afghan- 
istan is unable to implement them 
beyond Kabul and a few other cities. 
The city of Kabul itself remains under 
virtual siege despite the enormous con- 
centration of troops there. The authority 
of the Government of Afghanistan sim- 
ply does not extend beyond these few 
strongholds. In fact, in one major city it 
is reported that the governor, to go to 
his office for a few hours a day, must 
travel in a convoyed armored personnel 

Repression has intensified after the 
release of some political prisoners in the 
early months of 1980 — there are more 
political prisoners than ever before. The 

January 1985 



secret police, known as KHAD, are 
ubiquitous. The role of Soviet advisers in 
every aspect of the Afghan Government 
has increased to the point that every 
major decision appears to be made by 
Soviet advisers, not by Afghans. During 
the heavy fighting in the summer of 
1984, the Soviet forces were forced to 
take over an increasingly large share of 
the fighting, largely because the Afghan 
Army, rent by disloyalty, desertions, 
defections, and indiscipline, lacks the 
will to fight. 

Economic and Human Devastation 

What has happened to Afghanistan? Its 
economy has been virtually destroyed. 
That economy had already stagnated 
after the April 1978 coup, but since then 
Afghanistan has experienced wrenching 
economic disruption and destruction. 
Two years ago, in April 1983, Prime 
Minister Sultan Ali Kashman admitted 
at an economic seminar in Kabul that 
about 24 billion afghanis, some $432 
million in damage, had already been 
done to that country. This is one-half the 
total amount set for developing the 
country's economy during the 20 years 
before April 1978. Agricultural produc- 
tion has also declined, necessitating the 
importation of large amounts of grain. 
Severe food shortages exist in various 
areas of Afghanistan, in part because 
food has been deliberately burned and 
livestock destroyed. Most educated and 
skilled Afghans, along with millions of 
their fellow men, have fled as refugees 
to Pakistan, Iran, and other parts of 
Afghanistan. Valleys and villages have 
been deserted, factories are idle, and the 
agricultural infrastructure developed 
over centuries has deeply deteriorated. 
The effects of all this destruction are 
now emerging throughout the country. 
AfghanAid, a charitable organization, 
recently provided the results of its in- 
vestigation of over 5,000 children in 30 
Afghan provinces. The report estimates 
that half a million Afghans are in immi- 
nent danger of starvation. According to 
Dr. Frances D'Souza, director of the 
study, conditions in the developed areas 
of the country have been severely 
damaged, the standard of living for 
most Afghans has fallen drastically, 
malnutrition is widespread. Still, 
Afghans have not given up their fight to 
rid their country of foreign domination. 

The human devastation more than 
equa momic devastation. Viola- 

of human rights abounds. The 
ntinued its attempts to 

rol political expression and also the 
nformation. It has relentlessly 
ovietize Afghan 

political life and the social fabric of the 
country. Arbitrary arrests, detention, 
and torture continue to be commonly 
practiced by the ubiquitous security and 
police forces. Due process is completely 
absent for persons accused of political 
crimes. Homes are searched and robbed 
by armed soldiers without warrants. 
"Press gangs" roam the streets looking 
for recruits into the Afghan Army. 
Kabul saw a new wave of executions of 
suspected mujahidin over the summer. 
In the countryside, the Soviets have in- 
creased their policy of arbitrary retalia- 
tion against villages suspected of harbor- 
ing mujahidin fighters. Tales of brutali- 
ty to children, to ordinary civilians, are 
ubiquitous, too. 

Control and Censorship by Terror 

What has happened to Afghanistan? In- 
formation is not easy to come by. No 
humanitarian organizations are permit- 
ted to operate in Afghanistan. The In- 
ternational Committee of the Red Cross 
has not been allowed in Kabul since 
1982. Selected journalists, who report 
favorably on the Soviet Union and the 
Afghanistan regime, are permitted to 
operate in the country. Other journalists 
do not fare as well and are subject to 
capture and imprisonment without the 
usual international norms of trial and 
consular access. The experience of the 
French journalist, [Jacques] Abouchar, 
has recently demonstrated the hazards 
of attempting to function as a journalist 
in this environment. Two other French 
journalists were told in Islamabad only 
last month: "I warn you, and through 
you, all your journalist colleagues, stop 
trying to penetrate Afghanistan with the 
so-called guerrillas. From now on, the 
bandits and the so-called journalists 
accompanying them will be killed." 

Since last spring, Soviet forces have 
launched major operations throughout 
the country. In late April, the sixth ma- 
jor offensive in the Panjsher Valley was 
launched using — for the first time since 
World War II — high-level saturation 
bombing from airplanes based in the 
Soviet Union, driving out inhabitants, 
emptying valleys, swelling the tides of 
refugees already forced to flee their 

Refugees and Resistance 

What has happened in Afghanistan? As 
of 1983, there were a million and a half 
Afghan refugees in Iran. Some 4 million 
others have fled to Pakistan, and an 
estimated 2 million more are displaced 
within Afghanistan itself. Thus, in 5 
years, almost half the population have 

fled from their homes and sought refuge 
in internal or external exile. What ac- 
counts for this mass exodus, which one 
member of the International Rescue 
Committee called "refugee movement 
that is historically unparalleled"? What 
accounts for it is what has happened in 
Afghanistan. Throughout the country, 
fighting and skirmishes of heavily armed 
occupation troops against virtually un- 
armed civilians continue. But in spite of 
Soviet air power and increased involve- 
ment of Soviet military forces, the will 
of the mujahidin has not been broken. 
Intense fighting raged throughout the 
summer. Recent visitors describe Qan- 
dahar, Afghanistan's second largest city, 
as a living cemetery; Herat as a ghost 

But nowhere has the strength and 
resilience of the Afghan resistance been 
more apparent than in Kabul, where, 
during September and into October, the 
mujahidin have become increasingly ef- 
fective in challenging Soviet control of 
the Afghan capital, a virtual armed 
camp. In Afghanistan, we see confirmed 
the truth of political philosophers who 
have observed that conquest cannot 
serve as the stable base for the posses- 
sion and exercise of political power. 
Rousseau said it: "The strongest man is 
never strong enough to be always 
master unless he transforms his power 
into right and obedience and to duty." 
Conquest is achieved by force and 
violence, by armies wielding weapons, by 
invasion and occupation, but the trans- 
formation of might into right is achieved 
by persuasion, by persuasion of a claim 
to legitimate rule. In Afghanistan, we 
see again that rulers may achieve power 
by force but that simple possession of 
power does not obligate submission — it 
may even obligate resistance. The 
Afghan people — invaded, overrun, 
murdered, occupied — resist. Their resist- 
ance is a modern legend. Slated for in- 
corporation, absorption, secularization, 
the Afghan people refuse to acquiesce in 
the destruction of their society, culture, 
themselves as a nation. 

Soviet Expansionism and Aggression 

What has happened in Afghanistan? 
Why were the Afghan people subjected 
to this terrible suffering to begin with? 
Why did the Soviet Union invade 
Afghanistan anyway? Obviously, the 
people and Government of Afghanistan 
constituted no threat to the security of 
the U.S.S.R. Indeed, it is difficult to im- 
agine how an independent Afghanistan 
could conceivably have posed a threat to 
the Soviet Union. For decades, relations 


Department of State Bulletin 


between the Soviet Union and Afghani- 
stan had been a model of peaceful co- 
existence of two countries with different 
social and political systems. Afghani- 
stan, a member of the Nonaligned Move- 
ment, had no ties to other governments 
which might have caused concern to 
Moscow. It neither sought nor received 
weapons from Soviet adversaries. It did 
not seek to proselytize a fundamentalist 
revolution among neighboring peoples. 
Violence and anarchy in Afghanistan did 
not threaten the peace of the region. In- 
deed, there was no turmoil in Afghani- 
stan before April 27, 1978, when a 
violent coup marked the beginning of 
the effort to impose on the people of 
Afghanistan a foreign ideology and an 
alien way of life. There was no invita- 
tion, no request for Soviet help from the 
Afghan Government, whose leader was 
murdered by invading forces. There was 
no welcome from the Afghan people, 
and 5 years later there has been no 
withdrawal of occupying forces. 

Why did the Soviet Union invade 
Afghanistan in the first place? Perhaps 
history best explains it. Those who 
believe the Soviet Union is, at base, a 
contemporary embodiment of historic 
Russian goals, see the Afghan policy in 
that light. Since the time of the czars, it 
is said by those who argue along that 
line, Russian leaders have pursued the 
dream of a warm-water port on the In- 
dian Ocean. Domination of Afghanistan 
is, thus, essential to the fulfillment of 
historic territorial aspirations. A century 
ago, Afghans recognized these territorial 
aspirations. Abdur Rahman, Amir of 
Afghanistan, wrote: "The Russian policy 
in Asia is that, in any way, rightly or 
wrongly, friendly or unfriendly, with 
peace or war, the Islamic kingdoms 
should be washed away. ..." If contem- 
porary Soviets do, as some people 
believe, live out age-old aspirations in 
Afghanistan, so do contemporary 
Afghans. Afghans live out historic 
Afghan predictions in their resistance to 
conquest. Abdur Rahman also wrote of 
his people 100 years ago: "Whether 
trained soldiers or simple peasants, 
[they] would all sacrifice every drop of 
blood till the last man was killed, in 
fighting for their God, their Prophet, 
their religion, their homes, their 
families, their nation, . . . their liberty 
and independence." Day after day, con- 
temporary occupying armies experience 
the fulfillment of Abdur Rahman's 
prophecy that, day after day, contem- 
porary Afghans realize. 

NOVEMBER 15, 1984 1 

The General Assembly, 

Having considered the item entitled "the 
situation in Afghanistan and its implications 
for international peace and security", 

Recalling its resolutions ES-6/2 of 14 
January 1980, 35/37 of 20 November 1980, 
36/34 of 18 November 1981, 37/37 of 29 
November 1982 and 38/29 of 23 November 

Reaffirming the purposes and principles 
of the Charter of the United Nations and the 
obligation of all States to refrain in their in- 
ternational relations from the threat or use of 
force against the sovereignty, territorial in- 
tegrity and political independence of any 

Reaffirming further the inalienable right 
of all peoples to determine their own form of 
government and to choose their own eco- 
nomic, political and social system free from 
outside intervention, subversion, coercion or 
constraint of any kind whatsoever, 

Gravely concerned at the continuing 
foreign armed intervention in Afghanistan, in 
contravention of the above principles, and its 
serious implications for international peace 
and security, 

Noting the increasing concern of the in- 
ternational community over the continued 
and serious sufferings of the Afghan people 
and over the magnitude of social and eco- 
nomic problems posed to Pakistan and Iran 
by the presence on their soil of millions of 
Afghan refugees, and the continuing increase 
in their numbers, 

Deeply conscious of the urgent need for a 
political solution of the grave situation in 
respect of Afghanistan, 

Taking note of the report of the 
Secretary-General, 2 and the status of the 
diplomatic process initiated by him, 

Recognizing the importance of the initia- 
tives of the Organization of the Islamic Con- 
ference and the efforts of the Movement of 
Non-Aligned Countries for a political solution 
of the situation in respect of Afghanistan, 

1 . Reiterates that the preservation of the 
sovereignty, territorial integrity, political in- 
dependence and non-aligned character of 
Afghanistan is essential for a peaceful solu- 
tion to the problem; 

2. Reaffirms the right of the Afghan peo- 
ple to determine their own form of govern- 
ment and to choose their economic, political 
and social system free from outside inter- 
vention, subversion, coercion or constraint of 
any kind whatsoever; 

3. Calls for the immediate withdrawal of 
the foreign troops from Afghanistan; 

4. Calls upon all parties concerned to 
work for the urgent achievement of a 
political solution, in accordance with the pro- 
visions of the present resolution, and the 
creation of the necessary conditions which 
would enable the Afghan refugees to return 
voluntarily to their homes in safety and 

5. Renews its appeal to all States and na- 
tional and international organizations to con- 
tinue to extend humanitarian relief assistance 
with a view to alleviating the hardship of the 
Afghan refugees, in co-ordination with the 
United Nations High Commissioner for 

6. Expresses its appreciation and sup- 
port for the efforts and constructive steps 
taken by the Secretary-General especially the 
diplomatic process initiated by him, in the 
search for a solution to the problem; 

7. Requests the Secretary-General to con- 
tinue those efforts with a view to promoting 
a political solution, in accordance with the 
provisions of the present resolution, and the 
exploration of securing appropriate guaran- 
tees for the non-use of force, or threat of 
force, against the political independence, 
sovereignty, territorial integrity and security 
of all neighbouring States, on the basis of 
mutual guarantees and strict non-interference 
in each other's internal affairs and with full 
regard for the principles of the Charter of 
the United Nations; 

8. Requests the Secretary-General to 
keep Member States and the Security Council 
concurrently informed of progress towards 
the implementation of the present resolution 
and to submit to Member States a report on 
the situation at the earliest appropriate op- 

9. Decides to include in the provisional 
agenda of its fortieth session the item en- 
titled "the situation in Afghanistan and its 
implications for international peace and 

'Adopted by a vote of 119 (U.S.) to 20 
with 14 abstentions. 

UN Effort To End Soviet Invasion 

For 5 long years, the Afghan people, 
who are surely among the most courage- 
ous and independent in the world, have 
demonstrated their determination to re- 
main a people. What can the rest of us 
learn from this harsh experience? We 
can note and remember the incredible 
courage and endurance of the Afghan 

January 1985 

people. We can affirm that their battle 
is not lost, that their struggle is alive in 
Afghanistan's valleys and mountains and 
in this world body. 

The proposed resolution and ex- 
pected vote in this Assembly are a 
reflection of the views of us all against 
the outrage that continues in Afghani- 
stan. What can we do to help? We can 



remember the needs of the Afghan peo- 
ple, of the Afghan refugees in Pakistan. 
We can remember what that govern- 
ment — the Government of 
Pakistan — has done to ease the plight of 
the Afghan refugees. We can applaud 
the humanitarian work of the UN High 
Commissioner for Refugees, of the 
World Food Program, of private volun- 
tary agencies who labor without recess 
to assist the millions of refugees. We 
can support their efforts. We can note 
and appreciate the contributions of all 
those volunteers, of the Government of 
Pakistan, of the United Nations and 
other bodies to the survival of the 
Afghan refugees huddled on the 
borders. We can vote for the resolution 
that is offered here in this body. 

It is not too difficult to conceive a 
solution for Afghanistan's problems. In 
fact, the basis for our solution is present 
in the resolution on which we will vote 
in this body. The United States supports 
the resolution on Afghanistan before us. 
We believe its four major elements offer 
the basis for a negotiated settlement 
that will be just and viable, one in which 
the legitimate security interests of all 
the parties will be protected. 

These elements are the immediate 
withdrawal of foreign troops; the preser- 
vation of the sovereignty, territorial in- 
tegrity, political independence, non- 
aligned character of Afghanistan; the 
right of the Afghan people to determine 
their own form of government and to 
choose their economic, political, and 
social system free from outside interven- 
tion, subversion, coercion, or constraint; 
and the creation of the necessary condi- 
tions which would enable the Afghan 
refugees to return voluntarily to their 
homes. We believe this is a basis for an 
honorable solution which serves the in- 
terests of all parties. 

What else can we do? We can sup- 
port the steady and untiring efforts of 
the Secretary General [Javier Perez de 
Cuellar] and his personal representative, 
Mr. Diego Cordovez. They have made 
progress in defining a settlement and 
how it might come about. As President 
Reagan said in his address to this body 
on September 24 of this year, the 
United States strongly supports the ef- 
forts of the Secretary General and his 
persona] representative. We welcome 

ouncement that those efforts will 
in 1985. We support, too, the 

ng efforts the Government of Paki- 
Btan has made to seek a solution 

through this medium. We believe that 
these efforts offer the basis for hope 
that a negotiated political settlement can 
be found which will end the terrible war 
against the Afghan people. We believe 
that the people of Afghanistan, of Paki- 
stan, the people of the Soviet Union, 

would profit greatly from such a peace- 
ful solution. We very much hope that 
the processes here in the General 
Assembly contribute to that end. 


'USUN press release 131 of Nov. 14, 

Africa's Economic Crisis 

by Jeane J. Kirkpatrick 

Statement made in plenary session 
at the UN General Assembly on 
November 6, 1984-. 1 Ambassador 
Kirkpatrick is U.S. Permanent 
Representative to the United Nations. 

The grim images of death from starva- 
tion we have recently seen coming out of 
Africa have moved the compassion of 
people in the United States and around 
the world. The dimensions of Africa's 
immediate crisis seem almost over- 
whelming. In addition to the human 
tragedy in Ethiopia, 36 countries are 
plagued by abnormal food shortages, 
and an estimated 150 million are facing 
hunger and malnutrition. Drought has 
turned an already critical situation into a 
major crisis, overshadowing large parts 
of sub-Saharan Africa. This is why the 
Secretary General's initiative on Africa 
is so timely. We applaud his efforts to 
focus world attention on this imperiled 
region of the world. 

Even as we speak, people around 
the world are rallying to Africa's side. In 
my own country, all forms of aid to 
Africa, and particularly to those hardest 
hit by repeated cycles of destructive 
drought, have been rising significantly in 
the past months. Two weeks ago, my 
government announced an additional $10 
million in emergency food aid to 
Ethiopia. This raises our total aid to 
that country to $45 million this year, 
roughly double our emergency aid of last 
year. Only last week, President Reagan 
also approved an additional $45 million 
in emergency food assistance to the 
drought-ravaged African nations of 
Kenya, Mozambique and Mali. All in all, 
food assistance to Africa increased by 
1 75% this year, and we are still con- 
sidering other emergency appeal re- 
quests. In addition, private citizens in 
America continue to open their hearts 
and pocketbooks to the devastated 
peoples of Africa. Private voluntary 
organizations and UN agencies in this 
country are being swamped by inquiries 
and contributions. The response has 

been an affirmation of the special com- 
passionate bond between the peoples of 
Africa and the people of the United 

Other Western countries are also 
responding generously to this 
catastrophic situation. The European 
Community recently announced an 
emergency grant of nearly $22 million 
for relief efforts, and other individual 
countries are supplementing that 
assistance. We applaud all these efforts. 

Political Disruption of Relief Efforts 

Clearly, the current mobilization of the 
world community has been substantial. 
In fact, the surge in food shipments has 
begun to strain the region's transporta- 
tion system. Ships are stacked up in har- 
bors awaiting off-loading. Grain waits on 
the pier for trucks to transport it to 
refugee camps and feeding centers. Such 
situations dramatize the need for careful 
coordination of relief efforts, and they 
also make clear the obligation of na- 
tional governments to make relief ef- 
forts their first priority. What is more 
reprehensible than to find relief for 
some regions hampered and disrupted 
for political reasons? What could be 
more discouraging to the generous im- 
pulse of people abroad than reports of 
corruption among customs or military 
officials who control the transportation 
of these crucial food supplies? With this 
in mind, we should also ask ourselves 
what impression this General Assembly 
will leave if we appropriate $75 million 
for a grand conference center in Addis 
Ababa, while millions starve for lack of 
food elsewhere in the country. What 
priorities and preoccupations are 
reflected in such a decision in such a 

Though the tragic situation in East 
Africa has only recently focused the 
world's attention on Africa's economic 
woes, these problems are not new. They 
will not be washed away when the rains 
cqme once again. The United States has 


Department of State Bulletin 


long been cooperating with African 
countries in efforts to strengthen 
African development against the in- 
e\ uable. tragic cycles of climactic and 
economic change. Our support for inter- 
national institutions such as the Interna- 
tional Monetary Fund and the World 
Hank helps African countries meet 
short-term crises and lay the founda- 
tions for long-term development. We are 
by far the largest contributor to develop- 
ment efforts in the region through our 
bilateral aid programs and voluntary 
contributions to the UN Development 
Program, UNICEF [UN International 
Children's Emergency Fund], ICRC [In- 
ternational Committee of the Red 
Cross], and other multilateral programs. 
In the last 4 years, long-term U.S. 
bilateral development assistance to 
Africa has increased some 35%, averag- 
ing nearly $1 billion a year. This figure 
is over and above the emergency food 
assistance mentioned earlier. It is twice 
as much aid as my country gave only 7 
years ago. The same trend is mirrored 
in many other traditional donor coun- 
tries. Recent years have been marked by 
a major increase in the share of total of- 
ficial development assistance (ODA) 
devoted to low-income, sub-Saharan 

Despite significant assistance flows, 
for over a decade African development 
has lagged considerably behind that of 
other developing regions. The recent 
global recession compounded these 
longstanding problems, and now re- 
newed drought has driven millions of 
Africans further into destitution. A 
stark question confronts us: Had African 
development stumbled well before 
drought made a terribly difficult situa- 
tion desperate? State-controlled pro- 
grams designed to provide a shortcut to 
development had already resulted in a 
sharp decline in agricultural output. 
Many parts of the continent, including 
areas that were previously net food ex- 
porters, had become dependent on food 
imports. Coercion failed where market 
incentives might well have succeeded. 

Development Challenges 

Our challenge here today is not only to 
express our concern for the current 
plight of African peoples but also to 
chart a course for the future which faces 
and accepts the hard lessons of ex- 
perience. I am pleased to note that 
there is a growing consensus on what 
sort of policies are called for. A joint 
ECA [Economic Commission for 
Africa]- African Development Bank 

report put it very succinctly: "Growth," 
it declared, "cannot come simply from 
increased government spending and in- 
tervention in the economic process as in 
the past. What is necessary at this stage 
is for governments to act to remove 
obstacles in the way of individual ini- 
tiative, eliminate inappropriate prices 
and subsidies which discourage produc- 
tion, and effectively control waste and 
mismanagement in the public sector. 
This entails more reliance on efficient 
allocation mechanisms and more decen- 
tralization of decisions away from cen- 
tral authorities to individual producers 
and to firms." Simply put, these two 
regional institutions recommend that 
African governments put their faith in 
the people. They should do so, not for 
some ideological or political motives, but 
simply because it works. Market 
mechanisms and adequate producer in- 
centives have proven to be the most ef- 
fective engines of economic develop- 
ment. They worked in Europe and 
North America in the last century, and 
they are working in South and East 
Asia today. 

We believe the qualities required in 
this crisis'are those which have often 
served us well: qualities of compassion, 
realism, industry, and optimism. These 
are the qualities that transformed the 
vast wilderness of the new world. We 
try to make them the basis of our 
cooperation with countries in today's 
world who themselves face the 
challenges of development. The United 
States is ready to put aside every con- 
sideration of politics and self-interest in 
the effort to remove the shadow of 
death and suffering from men, women, 
and children threatened by starvation. 
But realism compels us to recognize that 
in the end the progress which alone con- 
sistently averts misery cannot be the 
gift of compassion. It cannot be the gift 
of one state to another any more than it 
can be the gift of an all powerful state, 
however enlightened. It cannot be a gift 
at all. Sustained development and 
economic growth can come only from 
the initiative, effort, and discipline of 
people themselves, the work of their 
own hands, heads, hearts, and fertile 

Director General Saouma of FAO 
[Food and Agriculture Organization] 
recently observed that "Aid will tend to 
flow to those who are most sincerely 
trying to help themselves." This princi- 
ple lies at the heart of the new U.S. 
assistance program we call the 
Economic Policy Initiative (EPI) for 
Africa. I am pleased to be able to an- 
nounce that only 2 weeks ago the U.S. 

Congress approved over $75 million in 
additional aid in FY 1985 to help rein- 
force the efforts of those African coun- 
tries we see successfully tackling their 
developmental problems. We hope with 
the successful implementation of the 
EPI to increase our development 
assistance to Africa over the next 5 
years by an additional $500 million 
directly to those countries whose policies 
encourage the initiative and enterprise 
of their people. 


Thus, despite the grim images of woe, 
despite the undeniable errors, failures, 
and setbacks, we have not lost faith in 
Africa's destiny. We put our faith in the 
African people, and in the freedom 
which we believe can unleash their vir- 
tues, abilities and energies. We put our 
faith in the growing realism and deter- 
mination with which many African 
governments are charting new and dif- 
ficult courses, courses that recognize the 
value of this freedom. We should all 
recall that the desperate gloom with 
which some view Africa today was mir- 
rored two decades ago by dire predic- 
tions for South Asia. Yet, though 
serious problems have yet to be sur- 
mounted, people there now look to the 
future with justifiable hope. So too can 
the people of Africa, if their govern- 
ments have the wisdom to take down 
the barriers athwart the many roads to 
progress. The future lies in the hands of 
farming women, when they have incen- 
tives to grow the food that will feed 
their hungry nations. It lies in the ambi- 
tion of small-scale entrepreneurs, when 
a climate exists to encourage their ini- 
tiative. It lies in the prudence of govern- 
ments that encourage productive private 
investment from abroad. It lies in the 
wisdom of leaders who realize that no 
great monuments to fame are as impor- 
tant, as impressive or as lasting as the 
accomplishments of individuals who toil 
in freedom for a good they have freely 
chosen as their own. 

'USUN press release 115 of Nov. 6, 
1984. ■ 

January 1985 



International Campaign Against 
Drug Trafficking 

by Jon R. Thomas 

Statement made in the Third Com- 
mittee at the UN General Assembly on 
November 15, 1984.. 1 Mr. Thomas is U.S. 
Representative to the Third Committee 
and Assistant Secretary for Interna- 
tional Narcotics Matters. 

I will address today a very special kind 
of global menace — a problem so complex 
that many thoughtful people do not 
believe it can be resolved, a problem so 
staggering in its implications for all our 
nations that we have no choice but to 
succeed. That problem is narcotics pro- 
duction, trafficking, and abuse. I will ad- 
dress the continuing problems we face 
and share with you an appraisal of our 
common future, emphasizing the new 
opportunities I see for more effective ac- 

I especially want to comment on the 
new spirit of improved bilateral and 
multilateral cooperation that increasing- 
ly justifies an optimistic appraisal of our 

It has often been said that there is 
no greater force than an idea whose 
time has come. Narcotics control is cer- 
tainly not a new idea; yet, I submit 
there is a more intensive worldwide 
declaration of a need for action being 
expressed at this time by more nations, 
with a greater sense of urgency, than 
during any previous period. Today, drug 
abuse is rampant throughout the com- 
munity of nations. It affects producer as 
well as consumer nations, and it is this 
mutual concern that has resulted in an 
expanded opportunity for concentrated 
action. I believe that the greatest force 
we can harness to combat international 
narcotics trafficking is this collective 
desire to rescue our societies, our in- 
stitutions and especially our children 
from this dread phenomenon. Joint ac- 
tions, especially multilateral actions 
within geographic regions and spheres 
of interest, can enhance and make more 
effective the best of our national and 
bilateral efforts. 

Granted, there will continue to be an 
anding need for nationally initiated 
trol programs and bilateral as- 
ce projects. Hut the evidence is 
compelling that we need something 
more than individual initiative. No na- 

can cope with drug abuse by relying 
only on its own treatment, prevention, 

and domestic enforcement. No single na- 
tion can resolve the international pro- 
duction or trafficking problems. 

The demand for drugs is so wide- 
spread and the supply of illicit drugs so 
great, that only a truly comprehensive, 
rigorously pursued international 
strategy will suffice. 

Progress in Control Efforts 

Because of the severity and complexity 
of the narcotics problems, some people 
say that the situation is hopeless. 
Nothing could be further from the truth. 
Recent events give reason to be op- 
timistic that the current approaches of 
the international community are making 
significant progress in establishing the 
base for potential control of production 
and distribution of major illicit 
substances. I choose these words 
carefully; we do not have control, but we 
have improved the possibility that we 
will gain control. 

We have been encouraged in recent 
years with many signs of progress in 
Latin America, Southwest and 
Southeast Asia. 

It would be appropriate to begin 
with Turkey, where a crop control pro- 
gram enforced by a strong government, 
with support from the international com- 
munity, led to a complete suppression of 
illicit cultivation. That ban continues to 
be effective today because of that same 
strong dedication. And, when the prob- 
lem spread to Mexico, there was an 
equally strong response. The Mexican 
Government's successful aerial herbicide 
eradication program has reduced the 
production of heroin from about 6.5 
metric tons in 1975 to an estimated 1.4 
metric tons in 1983, and also dramatic- 
ally reduced marijuana cultivation. The 
Mexicans call their efforts the "perma- 
nent campaign," recognizing that fight- 
ing narcotics requires a constant 
readiness and long-term sustained ef- 

The Mexican Government has also 
supported interregional activities, pro- 
viding helicopters and crews to assist 
the Government of Belize with the her- 
bicidal eradication of marijuana and pro- 
viding the Colombian Government with 
technical assistance on aerial marijuana 

Latin American Antinarcotics 

The very impressive Colombian cam- 
paign against narcotics, which has been 
increasingly effective over the past 3 
years, moved into a decisive new phase 
on July 5 when the national police began 
to test the aerial eradication of mari- 
juana with the herbicide glyphosate. 
More than 5,000 acres have been 
sprayed, and the Colombians, who an- 
ticipate an even more comprehensive 
program in 1985, are well on their way 
toward achieving control of cannabis 
production. They are continuing their 
strong effort to control cocaine produc- 
tion as well. The Colombians have paid a 
tragic price for this campaign. On April 
30, Minister of Justice [Bonilla] Lara, an 
outspoken advocate of strong antinar- 
cotics controls, was machine-gunned to 
death on a residential street in Bogota 
in a contract murder apparently financ- 
ed by narcotics traffickers. But the kill- 
ing did not deter President [Cuartas] 
Betancur and his ministers. Since the 
assassination, Colombian police have 
staged more than 1,500 raids resulting 
in 1,425 arrests and the destruction of 
about 50 cocaine laboratories. President 
Betancur has also declared that Colom- 
bia will extradite traffickers. 

In August, President Siles ordered 
Bolivian military as well as police units 
into the Chapare region, where coca 
cultivation and narcotics trafficking has 
expanded dramatically in recent years. 
These security measures are the pre- 
requisite for future coca control and 
eradication efforts in that area. The 
Bolivian Government has also mounted 
raids against traffickers in the Beni, 
another important narcotics trafficking 
center. By mid-year, Peru had increased 
its eradication of coca bushes in the 
Upper Huallaga Valley to nearly 4,900 
acres, compared to 1,700 acres 
eradicated in all of 1983. This program 
is continuing despite increased violence 
in the valley by terrorists as well as by 
narcotic traffickers. 

A great deal more needs to be done 
in Bolivia and in Peru to begin to deal 
adequately with the many narcotics 
related problems, but clearly movement 
in the right direction has begun. We and 
the UN Fund for Drug Abuse Control 
have responded to requests to assist 
projects to extend both coca control pro- 
grams and rural development assistance 
to the other major growing areas of 
Peru and Bolivia. While events in Co- 
lombia have given rise to hopes that ma- 
jor progress is being made against nar- 
cotics trafficking in Latin America, they 


Department of State Bulletin 


have also generated well-founded con- 
cerns that drug traffickers will seek new 
bases in other countries. 

Panamanian Defense Forres this 
past May discovered and destroyed a 
large cocaine complex, which had been 
constructed by Colombian traffickers in 
Darien Province, and also destroyed 
some large plantings of coca in that 
area, which is adjacent to the Colombian 
border. Panamanian authorities in- 
tercepted large quantities of ether used 
to refine cocaine, which was bound for 
that laboratory complex as well as 
laboratories in Colombia. 

Brazilian National Police have had to 
step up their activities in the Amazonas 
regions, where traffickers are encourag- 
ing tribal groups to expand their tradi- 
tional plantings of coca and are 
establishing cocaine laboratories. 
Similarly, Argentina has been obliged to 
devote increasing resources to deal with 
the rising number of cocaine laboratories 
which have been established within its 
borders during the past 2 years. 

Venezuela has adopted stronger 
antinarcotics laws, and the government 
has increased its cooperation with the 
Colombian National Police on narcotics 
trafficking and related problems in their 
common border region. Last year, 
Venezuela destroyed close to 500 acres 
of marijuana in its western provinces 
and, among its narcotics seizures, was a 
near record 667-kilogram shipment of 
cocaine, which was being transshipped 
through Caracas International Airport. 
This government has recognized the nar- 
cotics problem and stands ready to con- 
front it. 

A variety of programs have been 
launched in the Caribbean and Central 
America, including efforts to improve 
radar surveillance and interdiction 
capabilities in the Bahamas and to im- 
prove on interdiction in Jamaica. 

Asian Narcotics Efforts 

As enforcement activities have improved 
in certain Latin American countries, we 
have seen a shifting in the smuggling 
routes and tactics of narcotics traffick- 
ing organizations. A similar pattern of 
shifting sources has been seen in South- 
west Asia, where the substantial reduc- 
tions in opium poppy cultivation in 
Pakistan are being, unfortunately, over- 
shadowed by uncontrolled production in 
Afghanistan. In Pakistan, narcotics pro- 
duction has dropped dramatically from 
800 metric tons in 1979 to an estimated 
15 tons in 1983. Narcotics control pro- 
grams are operating in the Malakand, 
Gadoon-Amazai, and Buner areas with 

assistance from the United States and 
the United Nations, and the government 
has embarked on a Special Development 
and Enforcement Plan under the 
auspices of the UN Fund for Drug 
Abuse Control to extend its ban on 
opium cultivation into the remaining 
areas of the Northwest Frontier Prov- 
ince. We were especially encouraged by 
the response of international donors to 
this program. 

The Thai Government increased its 
commitment this year to controlling 
opium cultivation in civilian-police- 
military command villages in return for 
development assistance and eradicated 
800 acres in what we hope was a 
demonstration of future Thai intentions. 
The army has disrupted trafficking and 
refining activities along the border with 
Burma through military operations 
against trafficking groups. 

Earlier this year, the Government of 
Burma conducted effective military 
operations against narcotics traffickers 
in the Shan and Kachin States which 
resulted in the seizure of quantities of 
narcotics, chemicals, refining equipment, 
and weapons. The Burmese also 
eradicated more than 10,000 acres of 
opium poppy cultivation this past 

A key element in worldwide ad- 
vances in narcotics control has been the 
expanding role of the UN Fund for Drug 
Abuse Control under the effective 
leadership of Dr. Guiseppe DiGennaro. 
The Fund is now developing projects in 
support of coca control in South 
America, marking a long needed involve- 
ment by the United Nations and in- 
directly by European donors in a prob- 
lem which affects Europe as well as the 
United States. This UN activity was 
largely made possible by a pledge of $40 
million over 5 years by the Government 
of Italy. The Fund has also received 
pledges of more than $11 million from 
Italy, the United States and United 
Kingdom, with other pledges in the off- 
ing for the Special Development and En- 
forcement Program in Pakistan. Other 
key donors to source country programs 
include the Federal Republic of Ger- 
many, Saudi Arabia, Sweden, and Nor- 
way. The major donors support the 
Fund's leadership in the policy that all 
UN drug development projects will con- 
tain drug enforcement provisions and 
agree that economic assistance should be 
linked to commitments by recipient 
governments to eliminate illicit narcotic 
crops by specified dates. 

A Worldwide Challenge 

However, while progress is being made, 
we are faced with numerous challenges. 

Worldwide production of illicit 
opium, coca leaf, and cannabis is many 
times the amount currently consumed by 
drug abusers. Some governments do not 
have control of the narcotics growing 
regions, and prospects in several coun- 
tries are dampened by corruption, even 
government involvement in the narcotics 
trade. Markets shift and new production 
sources emerge even as we achieve suc- 
cess in eradicating current crops, most 
prominently evidenced by the transitions 
from country to country of the centers 
of heroin and cocaine production. To 
meet these challenges and others, we 
need to forge a true international 
alliance of concerned nations. 

The world requires narcotics control 
programs in all the significant producer 
countries supported by increased 
assistance from the international com- 
munity. But we also need more nations 
to apply their political resources to this 
problem. All nations have a vested in- 
terest in a successful solution, and when 
finally allied, their combined political 
and economic resources will make that 
successful resolution possible. The forg- 
ing of this alliance is more urgent than 
ever before. We must capitalize on to- 
day's opportunities to expand and im- 
prove narcotics control. There are 
greater incentives on the part of drug 
exporting countries to act and to move 
quickly. Virtually every source country 
has suffered the problems of economic 
dislocations, institutional instability, and 
crime related to narcotics trafficking. 
Several have also been besieged by 
political problems, including armed in- 
surgencies supported by profits from the 
drug trade. These source countries in- 
creasingly understand that they are the 
first beneficiaries of successful narcotics 
control programs. 

In a major address on narcotics on 
September 14, Secretary of State 
George Shultz noted that the growing 
narcotics network was part of a trend 
toward international lawlessness that 
has been increasing ominously over the 
past two decades. He called narcotics 
trafficking, terrorism, and similar kinds 
of outlaw behavior "the modern versions 
of piracy." The Secretary noted there is 
ample evidence showing that these dif- 
ferent types of lawlessness are linked. 
Money from drug smuggling supports 
terrorists. Terrorists provide assistance 
to drug traffickers. Organized crime 
works hand in hand with these other 
outlaws for their own profit. What may 

January 1985 



be most disturbing is the mounting 
evidence that some governments are in- 
volved in both narcotics trafficking and 
in terrorism. As Secretary Shultz went 
on to say, the world has good reason to 
suspect that narcotics smugglers are be- 
ing aided by certain governments, that 
they are getting protection and are be- 
ing provided with safe havens and sup- 
port in shipping drugs to the United 
States and other countries. 

Clearly the complicity of these 
governments in the drug trade, and 
government complicity in terrorist acts, 
are matters of grave concern; and I 
believe the increasing awareness of 
these adverse and other effects are im- 
proving the prospects for narcotics con- 

One of the more encouraging signs 
in the battle against the narcotics plague 
is the increased attention governments 
are placing on the need for bilateral and 
regional cooperation in antinarcotics ac- 
tivities. Underlying this trend is the 
realization by governments that first, no 
country is immune from the political, 
economic, and social problems associated 
with narcotics trafficking and second, it 
can be countered only if nations work 
together to bridge the legal and physical 
boundaries which divide them. 

In August, several leaders from 
Latin America, including Argentine 
President Alfonsin, Bolivian President 
Siles, Colombian President Betancur, 
Panamanian President Barletta and 
Venezuelan President Lusinchi traveled 
to Quito for the inauguration of Presi- 
dent Febres-Cordero of Ecuador. It is 
very noteworthy that, in meetings 
among themselves and with Vice Presi- 
dent Bush, the first topic was not the 
issue of financial debt nor regional 
military security, but narcotics control. 
That this occasion turned into an un- 
precedented summit meeting on nar- 
cotics attests to the awesome challenges 
narcotics production and trafficking pre- 
sent to the well-being of Latin American 
nations. What emerged from these 
meetings is what we might refer to as 
the "Spirit of Quito" — that is, the 
recognition among many Latin 
American nations that they must now 
stand together and work together to 
wipe out this scourge which threatens 
their societies. 

The United States believes that 
g regional, cooperative efforts are 
to lasting progress against nar- 
cotics trafficking in Latin America, 
throughout our hemisphere, and in the 

d at large. Thus, we strongly sup- 
port the spirit, coming from the meetings 

at Quito and Mar del Plata which called 
attention to the need for increased inter- 
national action to deal with the multiple 
political, economic, and social problems 
caused by narcotics trafficking. This 
spirit has been reflected in remarks to 
the General Assembly. For example, 
President Lusinchi emphasized the need 
for strong international action and 
cooperation to support the domestic ac- 
tivities of the individual governments 
when he addressed the General 
Assembly on September 24. He said: 
"The narco-traffickers cross frontiers 
every day and there is not a government 
in the world working alone which can 
eliminate the serious political and social 
threat which drugs represent." 

Leaders of Latin American govern- 
ments have recognized that drugs con- 
stitute a threat not only to the health of 
their citizens, but also to their societies 
and democratic systems. Now they say, 
"We have had enough." The vigor with 
which these leaders are collectively ap- 
proaching this problem is reflected in 
several resolutions, which have been 
proposed and still others being discussed 
by national delegations. 

We welcome the personal leadership 
taken by many Latin American leaders, 
and we support the strengthened com- 
mitment against narcotics trafficking 
and production, as underscored by the 
resolution drafted by the Government of 
Venezuela requesting that the Commis- 
sion on Narcotic Drugs give priority to 
consideration of a draft convention 
against drug trafficking. We look for- 
ward to working jointly in February, at 
the Commission meeting, building on the 
framework of existing conventions to 
strengthen the international resolve 
against narcotics trafficking, and we 
compliment President Lusinchi and his 
government on this thoughtful initiative. 

Similarly, this emerging spirit is 
reflected in the suggestions of our col- 
leagues from Argentina, Bolivia, Brazil, 
Colombia, Ecuador, Peru, and Venezuela 
to strengthen existing international in- 
stitutions and encourage governments to 
improve national legal and social 
frameworks to deal more effectively 
with drug trafficking. We look to ex- 
isting institutions, like the UN Fund for 
Drug Abuse Control, to achieve an im- 
mediate impact in meeting the narcotics 
challenge. The Fund is an established in- 
stitution with expanding activities. Let 
us support it financially and politically so 
that it can pursue the goals which the 
international community has endorsed. 


We believe there is need for improved 
coordination in the UN system and hope 
that the designation of the Under 
Secretary General for Political and 
General Assembly Affairs will lead to 
that coordination of the important work 
of the Fund, the Division for Narcotic 
Drugs, and the International Narcotics 
Control Board. We agree with the 
recently published findings of the Joint 
Inspection Unit that the specialized 
agencies should develop specific drug 
control programs for consideration by 
their member governments, and that 
governments should use their own 
resources whenever possible. We also 
concur with the recommendation that 
drug abuse projects should have specific 
conditions requiring governments to en- 
force narcotics control objectives. 

It is our hope that we can vote for 
and speak in support of several such ini- 
tiatives. We have some differences with 
sponsors on some language in drafts, 
and we welcome their assurances that 
we can discuss our respective viewpoints 
in a manner conducive to agreement, as 
was noted in my discussions just last 
week with Venezuelan Foreign Minister 
Morales Paul. 

While I have focused at length today 
on Latin America, in part because many 
of the resolutions of interest to this 
meeting have emanated from that area, 
our concern is, of course, for the 
worldwide effort. The United States 
stands ready to help the governments 
and peoples of Latin America, 
Southwest and Southeast Asia to work 
together for the common good. This task 
is spurred by President Reagan's pledge 
to a foreign policy that vigorously seeks 
to ensure effective international nar- 
cotics control. We believe that national 
and bilateral efforts must be com- 
plemented by strengthened regional 
cooperation in all global sectors. Recent- 
ly, we have offered to provide ap- 
propriate financial and technical support 
to improve regional narcotics enforce- 
ment information exchanges in Latin 
America, as well as to develop regional 
programs to create heightened public 
awareness of the personal dangers of 
drug consumption and the social and 
economic costs of the illicit drug trade. 
For several years now, we have sup- 
ported the special drug abuse initiatives 
of the Association of Southeast Asian 
Nations, or ASEAN, and encourage the 
work of the Pompidou Group and others 
who approach this problem on a multina- 
tional basis. We are also proud of our ef- 
forts these past 4 years to reduce drug 


Department of State Bulletin 


demand in the United States, where a 
irery effective national awareness pro- 
gram led by Mrs. Reagan has 
dramatically heightened community 

insiveness. We are encouraged by 
the spread of the parents movement, so 
vital in our country, to other societies. 
In all of those endeavors, we enjoy a 
spirit of cooperation with our Congress, 
which has boon most unequivocal in 
Seeking a linkage between narcotics con- 
trol and development assistance. 

Therefore, let us consider these 
Latin American initiatives as part of the 
growing worldwide expression of con- 
cern about the narcotics problem. The 
issues these resolutions address and the 
remedies they seek have implications for 
ill of our international efforts, and my 
government asks that all nations join 
together in this new alliance for our 
:ommon good. And when we have 
agreed on these resolutions, let us pro- 
ceed with development of common 
strategies. Experience dictates the 
cooperative program of work that is 

The grower-to-user chains which 
stretch across five continents must be 
sroken through a comprehensive pro- 
gram of international control. We must 
ipply pressure at all points in the 
chain — through crop control, through in- 
creased seizures of both drug products 
ind financial assets, through intensified 
nvestigation and prosecution of traf- 
fickers, and through effective treatment 
and prevention of drug abuse. Interna- 
tional strategies should give top priority 
to crop control — bans on cultivation and 
production, enforced when necessary by 
eradication and by interdiction and other 
enforcement programs operating as 
close to the source as possible. 

An effective international strategy 
should offer financial and technical 
assistance for narcotic control projects. 
We must improve our knowledge of all 
aspects of the problem and exchange in- 
formation to improve coordination of 
policy and effort. The people and 
governments of illicit drug producing 
countries must become more aware of 
the problems they export to other coun- 
tries — and the domestic problems they 
are creating within their own societies. 
There is a need to raise the foreign 
policy priority assigned to narcotics con- 
trol, to integrate narcotics into bilateral 
relations, and to upgrade the level at 
which narcotics matters are considered 
in foreign ministries. 

Assistance should be sought by drug 
producing nations and provided by donor 
countries with clearly defined crop con- 
trol objectives if we are to achieve suc- 
cess. We should recognize the need to 
link this assistance with crop control 
agreements. Governments of producing 
nations must have and demonstrate the 
political will to undertake effective crop 
control and interdiction programs. Part 
of that demonstration of will must be 
the commitment of social and political as 
well as material resources, and pro- 
mulgation and adoption of laws which 
facilitate control objectives. We need a 
higher level of awareness throughout 
the international community. We need 
to communicate through the world press 
the kind of intensive efforts that are be- 
ing made. Awareness is increasing, and 

it shows in many programs, including 
not just improved interdiction and 
eradication, but in the decisions of 
governments to consult with their people 
on solutions. 

Above all, we must work together, 
in an alliance at the national, regional 
and international levels through bilateral 
and multilateral programs. The agree- 
ments which we make here, which will 
manifest mutual respect and an 
understanding of individual and collec- 
tive needs, must send a signal to the in- 
ternational community that we have 
made common cause in a more vigorous, 
more widespread, and more united ef- 
fort to control international narcotics 
production and trafficking. 


HJSUN press release 132 of Nov. 15, 

Perspectives on the U.S. 
Withdrawal from UNESCO 

by Gregory J. Newell 

Address at Stanford University in 
Stanford, California, on October 31, 
1984. Mr. Newell is Assistant Secretary 
for International Organization Affairs. 

In addressing today's assemblage of 
present, potential, and professional 
academics — all of you concerned, of 
course, with the state of our interna- 
tional relations — it is timely for me to 
share with you our appraisal of the pres- 
ent course of U.S. multilateral foreign 
policy, taking as a centerpiece the condi- 
tion of relations between the United 
States and UNESCO [the United Na- 
tions Educational, Scientific and 
Cultural Organization]. 

I will assume that you have an in- 
terest in the workings of both inter- 
governmental and private transnational 
organizations. The success or failure of 
our nation's activity in foreign relations, 
not least in our multilateral foreign rela- 
tions, ultimately rests on the activity or 
inactivity of private persons. 

Important work promoting interna- 
tional cooperation is done by the educa- 
tional, cultural, and scientific institutions 
formed by private persons, through 
which they work to supply expertise, 
support, and professional outreach. 

It is from this perspective that I of- 
fer my thoughts on the meaning of our 
decision to withdraw from UNESCO as 
it bears on the conduct of international 

relations by the United States. I will 
also discuss the implications of that deci- 
sion for the UN system generally. 

There are conflicting views as to the 
manner in which the United States could 
best move to achieve the ideals to which 
UNESCO was originally dedicated. 
There is no disagreement that those 
were worthy ideals. There is no substan- 
tial disagreement, either, that UNESCO 
has strayed far from fidelity to them. 
Our experience in receiving the official 
responses of some 126 nations to our 
UNESCO decision emphatically confirms 

The responsible question now is this: 
"What can the United States do to 
achieve those objectives — by what 
means, in what forums, through what 
cooperative activities?" Our basic thesis 
is simple; I believe it is also sound: a 
methodical analysis of present realities 
can diagnose what must be done to pro- 
duce genuine and necessary interna- 
tional cooperation and development. 

Our decision to withdraw from 
UNESCO is a paradigm of the process 
of keeping workable international 
cooperation alive. To keep effective 
cooperation alive, we must insist on 
fidelity to the development that any 
given UN specialized and technical agen- 
cy was created to serve. 

Our critics seek a rollback of the 
withdrawal decision and would urge us 
at this time to explore no other alterna- 
tives. Such an approach is, indeed, 

January 1985 



negative. It will achieve no needed 
reforms in UNESCO; will fail to ad- 
vance cooperative activities in interna- 
tional education and communications; 
and will divert attention from the sole 
object on which attention should be 
focused — the conduct of UNESCO in 
discharging its legitimate mandate. 

We really should move on to the re- 
maining questions — with their implica- 
tions for other UN system agencies. 
Thus, I am here to discuss the question 
of UNESCO reform; I am not here 
merely to reexamine the U.S. with- 
drawal decision. That decision was 
scrutinized before it was effected and 
was responsibly announced in December 
1983 — with constructive results. It has, 
in fact, been ratified by an overwhelm- 
ingly affirmative response on the part of 
unbiased parties genuinely concerned for 
the welfare of the multilateral system. 

UNESCO has long known that it was 
coming to face an increasingly troubled 
existence. The United States does want 
to find a way to solve the problems that 
are found in UNESCO. The United 
States desires also to describe the basis 
on which we believe that essential func- 
tions, once entrusted to UNESCO, can 
be preserved in forums that are effec- 

Much of the work of UNESCO is 
praised, naturally enough, by those who 
are paid to do it. Plainly, their judg- 
ments should not be presumed to be un- 
biased. Often, we are now discovering, 
those who criticize our UNESCO with- 
drawal decision imply that they speak 
for large and deservedly respected scien- 
tific and cultural organizations— but 
speak, in fact, only for themselves. The 
truly responsible are quite aware that 
we have acted responsibly to cure long- 

UNESCO programs and personnel are heavily 
freighted with an irresponsible political content 
and answer to an agenda that is consistently 
inimical to U.S. interests. 

There was a question whether the 
United States should withdraw from 
UNESCO, but I had thought that any 
real controversy as to whether the 
responsible American public supported 
our decision was put to rest at the Dart- 
mouth debate when [Democratic presi- 
dential candidate Walter] Mondale en- 
dorsed the decision to withdraw from 
UNESCO— after The New York Times 
and The Washington Post had also done 

I can speak to the question of 
whether our decision has been effective. 
In our many multilateral consultations, 
one statement has consistently been 
made. The recurring statement is that 
the Reagan Administration has charted 
a course of renewed commitment in the 
multilateral system that is strong and 
coherent, clearly understood, and 
decisively implemented— though there 
are those who may disagree with that 

There are those who say that we, 
the United States— the Reagan Ad- 
tration— have created a UNESCO 
icl ci il ic imply thai our with- 
irce of i 'NKSCO's prob- 
Mon- thoughtful i of our 

,'ii affair are quite aware that 

festering problems that were coming to 
discredit genuine attempts to effect in- 
ternational development in education, 
science, culture, and communications. 

Making the Decision to Withdraw 

When the Department of State con- 
fronted the question of whether con- 
tinued U.S. membership in UNESCO 
could be productive— given UNESCO's 
declining effectiveness and the long- 
standing adverse impact of its programs 
and attitudes on U.S. interests— we 
asked basic and important questions. 
UNESCO policies had frequently 
served anti-U.S. political ends, and the 
Reagan Administration had frequently 
advised UNESCO of the limits of U.S. 
(and Western) toleration of misguided 
policy and programs and budgetary mis- 
management. For nearly 3 years we 
applied to UNESCO the same priorities 
and criteria that guide our relations to 
all multilateral organizations. Our policy 
priorities have been to: 

• Reassert American leadership in 
multilateral affairs (we are no longer in- 
terested solely in a practice of damage 

• Implement a strict budgetary 
policy of zero net program growth and 
significant absorption of nondiscre- 
tionary cost increases for the first half 
of the decade (we will no longer ac- 
quiesce in budgetary expansion that has 
tripled outlays in the UN system during 
the past decade); 

• Obtain equitable American repre- 
sentation within the secretariats of 
multilateral agencies (we expect to have 
Americans in key policy positions); 

• Reduce the burden imposed on all 
nations by an excessive number of 
lengthy international conferences (we 
have no desire to send American dele- 
gates to all of the 1,000 major confer- 
ences scheduled each year); and 

• Advocate and create a role for the 
private sector in each of the interna- 
tional organizations (we recognize the 
value, experience, and resources of the 
vital private sector). 

With respect to each of these pri- 
orities, UNESCO's performance had 
fallen significantly below that of other 
major international organizations. 
UNESCO alone, among the major or- 
ganizations, had not responded. 

In June 1983, consequently, an in- 
depth policy review of U.S. participation 
in UNESCO was commissioned. At the 
same time, a special effort was made to 
describe our reasoned expectations as to 
policy, programs, budget, and manage- 

At the conclusion of this two- 
pronged effort to reassess, reason, and 
rehabilitate, the President concluded 
that continued U.S. participation in 
UNESCO — as it is currently organized, 
focused, and directed — does not serve 
the interests of the United States. What 
appeared was a persistent pattern of 
three major problems. 

Extraneous politicization of vir- 
tually every subject dealt with: educa- 
tion, natural and social science, 
culture, communications, human 
rights, disarmament. UNESCO pro- 
grams and personnel are heavily 
freighted with an irresponsible political 
content and answer to an agenda that is 
consistently inimical to U.S. interests. 
The approach that UNESCO consistent- 
ly takes to "disarmament" reflects either 
a specific pro-Soviet bias or, at best, 
adheres to the naive and simplistic New 
Delhi declaration. 1 Human rights pro- 
grams and resolutions in UNESCO are 
almost invariably infected with Soviet 
and statist concepts, of alleged "collective 
rights," in denigration of individual 
rights and freedoms recognized in the 


Department of State Bulletin 


Universal Declaration of Human Rights. 
UNESCO lends itself to the machina- 
tions of those who think that "collective 
rights" (including those of the state) are 
equal to or more significant than the 
rights of the individual. 

UNESCO's current budget for 
educational programs — once widely 
respected and professionally effective — 
now places heavy emphasis on Soviet- 
inspired "peace and disarmament" initia- 
tives. Some $978,000 is spent on that ac- 
tivity, as against $62,000 for the eradi- 
cation of illiteracy among 10 million of 
the world's refugees. 

Voluble UNESCO participants are 
persistently hostile to U.S. political 
views, values, and interests. Our par- 
ticipation, then, in UNESCO "consensus" 
can, on occasion, amount to complicity 
in vilification of the United States — 
which is part of everyday life there. The 
UNESCO environment is relentlessly 
hostile to our ideals, and this environ- 
ment is unlikely to change, whatever 
reasonable effort we bring to bear. 

An endemic hostility toward the 
basic institutions of a free society, es- 
pecially a free market and a free 
press, coupled with the promotion of 
statist theories of development. 
Various UN agencies seek to give life to 
their vision of a "new international eco- 
nomic order" — compulsively statist and 
necessarily ineffectual. UNESCO func- 
tionaries soon undertook their own 
quest — to create the "new world infor- 
mation and communication order." This 
contemplated "new order" of things 
would, in particular, establish a program 
in which we will not acquiesce. If imple- 
mented, it would threaten our First 
Amendment rights — the freedom of the 
press. To this program we remain un- 
alterably opposed. There is no sign that 
powerful elements within UNESCO have 
now abandoned advocacy of their cher- 
ished "new order." In line with the agen- 
da of the "new world information and 
communication order," repression of a 
free press will persistently be advocated 
within UNESCO. This we can surely in- 
fer from the statements of Associate 
Director General Gerard Bolla in Paris 
in November 1983, and of UNESCO's 
Director General [Amadou-Mahtar] 
M'Bow in a December 14, 1983, press 
conference in New Delhi. 

And yet another "new order" may be 
waiting to be born in Paris. A large 
number of UNESCO members have 
pressed for action to create a "code of 
conduct" controlling the operations of 
multinational corporations. This would 
include the film, book publishing, music, 

and television industries, whose receipts 
from abroad are estimated to total some 
$3.5 billion each year. This initiative, 
with or without our opposition, will 
return again and again as circumstances 
seem propitious to its proponents. We 
oppose such a movement. We suggest 
that opposition from without — principled 
and total opposition — would be the most 

the Secretariat now presumes to direct 
too often, not to take direction; that it 
now undertakes to formulate program 
directions, not to implement them; that 
it now offers an idyllic Parisian respite 
from the rigors of existence in the Third 
World, not a self-effacing service to the 
"South" — in the "South." It should suf- 
fice to note that the United States fully 
appreciates that such service should be 

UNESCO management practices are 
atrocious. . . . Some 80% of UNESCO's $400-million 
biennial budget is consumed in Paris. 

The most irresponsible and unre- 
strained budgetary expansion in the 
United Nations system, and serious 
management problems. UNESCO has 
far exceeded the "zero net growth" 
budget policy of the United States and 
the Geneva group 2 (which together con- 
tribute 74% of UNESCO's budget). It 
initially proposed, for the 1984-85 bien- 
nium, a 9.7% program increase. This it 
did while other UN system agencies re- 
sponded with zero or near-zero proposed 
program growth — Food and Agriculture 
Organization (0.5%), World Health Or- 
ganization (-0.31%), International 
Labor Organization (1.92%), World 
Meteorological Organization (0%), World 
Intellectual Property Organization 
(-1.12%), and the United Nations itself 
(0.7%). UNESCO's budget has grown 
approximately 300% between 1972 and 

UNESCO management practices are 
atrocious. It is widely accepted that only 
one dollar out of every five is allocated 
to programs for the developing world. 
Some 80% of UNESCO's $400-million bi- 
ennial budget is consumed in Paris. T.C. 
Young, UNESCO's director of its 
Bureau of the Budget, confirms that 
estimate. Some 81% of UNESCO's 
employees, moreover, are based at head- 
quarters in Paris, leaving only 19% in 
the field. No serious effort had been 
made either to control or cut back on 
conferences and major meetings (400 
scheduled in 1984), publications (300 
million document pages in 1983), or 
other effluvia of a large and unfocused 
bureaucracy in excess of 2,300 persons. 

Consider another focal point of 
criticism — the UNESCO Secretariat. 
Most honest observers would agree that 

given to the "South," and that we seek 
ways effectively to contribute to that 
service — rather than to the care and 
feeding of a bloated centralized cultural 
bureaucracy in Paris. 

What Is the Problem? 

In a word, the U.S. withdrawal from 
UNESCO is not the problem; 
UNESCO's conduct is. The United 
States is engaged in a serious attempt to 
solve the problem, not to exacerbate it. 
UNESCO's flawed redefinition of its un- 
changed historic mandate is the source 
of the problem. 

The United States still seeks solu- 
tions and desires to support workable 
and authentic international cultural 
cooperation. Our UNESCO review was 
not cursory; neither was it prejudiced. 
We genuinely sought to determine how 
we could participate in UNESCO on any 
satisfactory terms and simultaneously 
sought, in good faith, to persuade the 
organization and its Director General 
that UNESCO had embarked on a 
counterproductive path. 

The same question we asked in con- 
nection with UNESCO is deservedly 
raised in connection with the operation 
of other UN system organizations. But if 
other agencies have remained faithful to 
the charge that brought them into being, 
the answer will certainly differ. It is cur- 
rently our conclusion that sufficient 
fidelity to their respective missions does 
characterize most UN system agencies. 
The International Labor Organization, 
the Food and Agriculture Organization, 
the International Atomic Energy Agen- 
cy, and the World Health Organization, 
among others, give no serious observer 
cause for significant complaint. 

January 1985 



Some suggest that no alternatives to 
UNESCO can be found. But we do have 
other alternatives: multilateral, regional, 
bilateral, and private sector alternatives. 

In some elements of this approach, 
we have been joined by others — though 
we categorically did not conspire to set 
out on a joint course, nor did we even 
solicit "conscious parallelism." Our deci- 
sion to withdraw has at least moved 
UNESCO to talk of reform. Now all par- 
ties seek change of some sort. A group 
of 24 Western nations has expressly 
urged that significant changes be made. 
Our traditional allies have taken posi- 
tions most similar to our own, though 
they draw their own bottom-line conclu- 
sions about membership. 

their stable existence, their financial 
well-being, or their managerial capacity. 
The problems that currently afflict inter- 
national cooperation and development 
are not new, but the approach of this 
Administration is perhaps new. The 
general approach we have taken with 
respect to international cooperation and 
development in and through the United 
Nations is very well illustrated by our 
decision to withdraw from UNESCO. 
The signal that a U.S. withdrawal 
from UNESCO has already sent to 
multilateral international organizations 
is not that the United States is bent 
upon withdrawal from multilateral af- 
fairs. It is, rather, that we seek effec- 

. . . the U.S. withdrawal from UNESCO is not the 
problem; UNESCO's conduct is. 

The British have now said that they 
will reconsider their own commitment to 
participation if significant progress is 
not made this year. The Dutch, the 
Danes, the Italians, the Canadians, and 
the Japanese have written to the Direc- 
tor General of UNESCO. They have now 
been joined by others of the Nordic 
countries in calling for "sweeping 
reforms." The Federal Republic of Ger- 
many, too, has publicly urged UNESCO 
reform. The general posture of our allies 
is, nonetheless, that UNESCO reform 
might induce the United States to stay. 

A Summary View of UNESCO 

Where, then, is UNESCO today, and 
where stands the United States with 
respect to it? Many other countries, not 
always openly supportive, do rely on the 
United States to provide leadership in 
international organizations and to pro- 
tect the interests of all democratic 
peoples. The President's decision to 
withdraw from UNESCO has already 
moved other member states to more 

risible activity in other interna- 
tional forums. 

The United States still seeks solu- 
tions and desires to support genuine and 
effective international cooperation. The 
United .States stands ready to imple- 

our pledge to support means of in- 
ternational cooperation that offer some 
mable promise that they will work. 
We appreciate the continuing work of 
Mrell-functioning multilateral organiza- 

bul We do not take for granted 

tive, nonpoliticized, and genuine means 
of achieving international cooperation 
and coordination. 

This is clearly the posture that 
President Reagan has consistently 
taken. He knew from personal ex- 
perience that the belief was surely naive 
that mere membership in the League [of 
Nations] or in the United Nations would 
suffice to banish conflict between na- 
tions. The cause was oversold, and 
disappointment was inevitable. But the 
Reagan Administration is justly proud of 
the continuity of its connection with the 
best of the hard-won — blood-won — 
insights gained from the World War II 
years. This President personally 
remembers, as he noted in remarks 
following his June 17, 1982, UN speech: 

My longevity has given me a perspective 
on the founding of the United Nations that 
was useful in the preparation of the remarks 
that I made today. ... I do remember the 
U.N.'s first days and our hopes at that time 
that this would be a forum for all mankind, 
replacing armed conflict with debate. ... I 
recall the inspiration of [FDR's] declaration 
with Winston Churchill of the Four Freedoms 
at a time when the freedom-loving people of 
the world were sorely in need of inspiration. 
In a very real way, this, an institution 
dedicated to peace, was his dream. . . . 
|H]owever imperfect the reality may be, 
Americans still dream that dream. 

I am younger— by four decades— and 
must consult the written record to gain 
some sense of that national experience, 
which is the personal experience of 
those we venerate as wise and ex- 

We have consistently sought to 
assure all those concerned that the U.S. 
Government is not now abandoning 
its international responsibility for coop- 
erative multilateral activity. But if an 
existing organization persistently fails to 
render the service it was engaged to 
perform, alternatives must be explored. 
Alternatives Will be offered; alternatives 
will be accepted. Alternatives, in the 
end, will increasingly make goods and 
services available. 

The interests we have entrusted to 
the specialized technical agencies of the 
UN are, ultimately, our national in- 
terests. We recall that the services of 
UN agencies were, in very large 
measure, performed by other coopera- 
tive agencies long before the UN was 
created. Our nation, under any leader- 
ship, will surely always seek to identify 
and achieve its lasting and fundamental 
interests. It is true, of course, that our 
national interests are served by interna- 
tional cooperation. We do, therefore, 
seek to bring fully two-thirds of the 
world— those peoples outside the Euro- 
peanized West— into the "scientific age," 
as a Nobel laureate, the physicist I. I. 
Rabi, once put it. Accordingly, we do 
seek to advance the cause of interna- 
tional cooperation in education, science, 
culture, and communications. But our 
overriding aim must be to advance the 
interests of our own nation and its 
citizens— just as others legitimately seek 
to advance the interests of their nations 
and their citizens. . 


The processes and objectives of genuine 
and effective international cooperation 
are not being abandoned by the Reagan 
Administration. Attempts to achieve in- 
ternational cooperation of this sort are, 
rather, being strengthened. We take 
seriously the obligation to achieve inter- 
national cooperation. Our decision to 
withdraw from UNESCO was, in the 
words of one astute observer, "pro-UN." 
We will continue to support the United 
Nations with reason and compassion— 
and there we will sustain American 
values, express American views, and 
pursue American interests. 

■See the communique of the March 1983 
Nonaligned Movement summit. 

2 An informally affiliated group of 
Western donor nations. ■ 


Department of State Bulletin 


Situation in Kampuchea 

by Jeane J. Kirkpatrick 

Uu UN General 

I ; . , ■ "■ ■■ ■■ • 1984 1'"- 

Uuaador Kirkpatrick is US, Represent- 
ative to the United Nations. 

A principal purpose of this United Na- 
tions is to preserve the right to self- 
determination, independence, security, 

and sovereignty of all nations. The 
Charter is clear, so is the history of the 
United Nations in emphasizing and en- 
couraging self-determination and in- 
dependence of nations. The United Na- 
tions can, indeed, be proud of its role in 
advancing self-determination for millions 
of people and in working to preserve the 
independence of all nations. There is no 
principle that was more widely shared or 
more basic than that one nation should 
not use force to invade and subjugate 
another people. 

The people of Cambodia, however, 
continue in occupation by a foreign 
power, denied their right to self- 
determination and independence by the 
Socialist Republic of Vietnam, which in- 
vaded and continues illegally to occupy 
Cambodia. Five times the world com- 
munity has called on Vietnam to 
withdraw its illegal expeditionary force 
and to restore to the Khmer people their 
right to seek their own destiny under a 
freely chosen government without out- 
side interference. The overwhelming 
margins which have supported the 
General Assembly's call for withdrawal 
of foreign forces reflect the concern of 
the great majority of the world's nations 
at the continuing tragedy in Cambodia. 

What has occurred in the wake of 
these resolutions? Hanoi, aided and abet- 
ted by the Soviet Union, ignores those 
resolutions, continuing its illegal occupa- 
tion of Cambodia and its oppression of 
the Cambodian people in violation of the 
Charter of the United Nations and in de- 
fiance of the expressed will of the 
General Assembly, offering to the Cam- 
bodian people no opportunity for self- 
determination or self-government. The 
need to address the situation in Cam- 
bodia for the sixth time is testimony to 
the stubborn policy of military conquest 
and colonization being pursued by the 
Socialist Republic of Vietnam. 

During the past two decades, Cam- 
bodia's people have endured unmatched 
suffering. Hanoi's use of Cambodian ter- 
ritory in its war against the South and 

the war between the Khmer Republic 

and the Communist Khmer Rouge, aided 
In Hanoi, destroyed Cambodia's 
economy. Khmer Rouge victory in 1975 
brought a horror the world still strug- 
gles to comprehend. Systematic political 
murder and starvation took the lives of 
more than 1 million Cambodians and 
nearly destroyed an ancient culture. 

The Socialist Republic of Vietnam 
must bear a full measure of responsibili- 
ty for the tragic tyranny of the Khmer 
Rouge. Vietnam's support was critical to 
the Khmer Rouge victory in 1975. 
Hanoi's claim that it invaded Cambodia 
to liberate the Khmer people from Pol 
Pot and that it remains there only to 
prevent his return to power is a 
transparent deception. Vietnam deposed 
Pol Pot only when it became apparent 
that it could not dominate and control 
the Khmer Rouge. No one laments the 
demise of the Khmer Rouge, a regime 
detested universally. But Hanoi did not 
invade Cambodia for the purpose of 
returning Cambodia to its people. In- 
stead, Vietnam did so in order to install 
a puppet regime largely comprising 
former followers of Pol Pot, including 
the hated Heng Samrin himself. 

Now, the Cambodian people are 
threatened with the loss of their 
homeland and the extinction of their 
culture. Thousands of Vietnamese na- 
tionals have settled throughout Cam- 
bodia, abetted and encouraged by Hanoi. 
Independent observers have estimated 
their number to exceed 500,000. Viet- 
nam's clients in Phnom Penh have been 
instructed to assist Vietnamese, both 
former residents and new immigrants, 
in any way possible and to consult with 
their Vietnamese superiors before taking 
any action affecting Vietnamese settlers. 
Vietnamese immigrants are also given 
extraterritorial status and many have 
reportedly received Cambodian citizen- 
ship. This officially sanctioned Viet- 
namese immigration raises serious ques- 
tions about Hanoi's long-term intentions 
toward Cambodia. It will be the ultimate 
tragedy if Cambodia, decimated by war 
and famine, should now be extinguished 
as an entity, overrun, submerged, and 
colonized by its expansionist neighbor. 

Nearly 250,000 Khmer civilians re- 
main encamped along the Thai- 
Cambodian border, unable or unwilling 
to return to their homes. Assistance to 
them remains an international respon- 
sibility. The United States will continue 
to do its share and urges other nations 

to continue their support for this pro- 
gram of humanitarian assistance. We of- 
fer our sincere appreciation to the 
Secretary General and his Special 
Representative for Humanitarian 
Assistance to the Kampuchean People 
Dr. Tatsuro Kungi for their efforts on 
behalf of the Khmer people uprooted by 
invasion and war. The staffs of the UN 
border relief operation, the World Food 
Program, the UN High Commissioner 
for Refugees, and other specialized UN 
agencies, the International Committee of 
the Red Cross, and the various volun- 
tary organizations continue their impor- 
tant and untiring work in providing 
emergency food and medical care to the 
displaced Cambodian people, often under 
dangerous conditions caused by Viet- 
namese attacks. Their efforts have 
earned the commendations of the inter- 
national community and our admiration. 
Special thanks are also due to the Royal 
Thai Government for its aid to the 
Khmer people, particularly during the 
fighting earlier this year. 

Vietnam's invasion and occupation of 
Cambodia is a challenge to the UN 
system and to the international com- 
munity. The challenge is to induce Viet- 
nam to withdraw its army and to restore 
Cambodia's independence, sovereignty, 
and neutrality without permitting a 
return to power of the Khmer Rouge. 
The members of the Association of 
South East Asian Nations (ASEAN) 
have provided the world the leadership 
to meet the challenge here at the United 
Nations and beyond. 

The 1981 UN-sponsored Interna- 
tional Conference on Kampuchea, in its 
final declaration, worked out the prin- 
ciples which must guide a settlement of 
the Cambodian problem: a cease-fire and 
withdrawal of all foreign forces under 
UN supervision; free elections under in- 
ternational auspices; and arrangements 
to ensure that armed groups do not in- 
terfere in free elections and respect the 
results of those elections. Ninety-four 
nations participated in that conference. 
Its principles have been endorsed by five 
successive resolutions of the General 
Assembly. They provide the best basis 
for meeting the challenge posed by the 
Cambodia crisis. The United States sup- 
ports these principles and extends its ap- 
preciation to Mr. Willibald Pahr, Chair- 
man of the International Conference on 
Kampuchea, and to Ambassador 
Massamba Sarre and his colleagues of 
the ad hoc committee for their continu- 
ing efforts in seeking a settlement in 

January 1985 



The United States affirms its sup- 
port for Mr. Pahr's recent proposal to 
internationalize the temple complex sur- 
rounding Angkor Wat so that these 
ruins can be restored free from danger 
of war. Mr. Pahr's proposals merit inter- 
national support. The ruins at Angkor 
Wat and Angkor Thorn represent the 
greatest achievements left by classical 
Khmer civilization and are a cultural 
treasure of importance to the entire 
world. Their destruction through neglect 
and war would be a tragic loss to us all. 
Despite political concerns, the ASEAN 
nations have endorsed Mr. Pahr's ini- 
tiative. Unfortunately, Phnom Penh and 
its Vietnamese masters have denounced 
the proposal. It is not surprising that 
Hanoi shows no interest in preserving 
these relics of Cambodia's glorious 
cultural heritage. But it is sad that 
Hanoi's Cambodian clients are unable to 
assert enough independence even to 
save the enduring symbol of Khmer 

Vietnam, unfortunately, rejects the 
reasonable proposals of the ICK (the In- 
ternational Conference on Kampuchea), 
insisting that the situation in Cambodia 
is irreversible. ASEAN has sought to 
work out the framework of a settlement 
which preserves the legitimate security 
concerns of Cambodia's neighbors, in- 
cluding Vietnam, as long as the key 
elements of Vietnamese withdrawal and 
free elections are preserved. The 
September 1983 ASEAN "Appeal for 
Kampuchean Independence" proposed a 
territorially-phased Vietnamese 
withdrawal, coupled with an interna- 
tional peacekeeping force and 
reconstruction aid in the area vacated, 
as part of a Vietnamese commitment to 
a complete withdrawal and elections. 
Hanoi rejects this proposal, insisting 
that it will maintain its clients in Phnom 
Penh for as long as necessary until the 
world finally accepts its domination of 
Cambodia. Hanoi ultimately seeks, then, 
the legitimization of its client regime. 

But that regime clearly does not 
represent the Cambodian people and its 
pretensions to do so have been repeated- 
ly rejected by the people of Cambodia, 
by its neighbors and by the General 
Assembly. Vietnam no longer offers its 
clients as claimants to Cambodia's seat 
at this Assembly. Their regime remains 
dependent on Vietnamese soldiers and 
Vietnamese officials to remain in place. 
The growing appeal of the nationalist 
organizations led by Prince Norodom 
Sihanouk and former Prime Minister 
Son Sarin is indicative of the fact that 
the Khmer people are unwilling to ac- 
cept, a regime established on the 

bayonets of a foreign army. The United 
States welcomes the presence in this 
debate of Prince Sihanouk and Son 
Sann. They and the organizations they 
lead are the true embodiment of Khmer 
nationalism and the hopes of Cambo- 
dians for a future which is neither 
Khmer Rouge nor Vietnamese. 

To what lengths will Vietnam's 
rulers go to impose their will on others? 
The war in Cambodia, and the confron- 
tation with China it has engendered, 
have drained Vietnam's economy. With a 
per capita income far lower than any of 
its ASEAN neighbors, indeed, one of 
the lowest in the world, Vietnam sup- 
ports the world's third largest standing 
army. Unable to pay the costs itself, 
Vietnam has turned increasingly to the 
Soviet Union for assistance. Massive 
Soviet aid meets Hanoi's military needs 
but cannot meet the needs of the Viet- 
nam people, thousands of whom have 
risked their lives to flee in small boats 
rather than remain in a Vietnam op- 
pressed and destitute. Other nations 
have reduced their aid because of their 
opposition to Vietnam's occupation of 
Cambodia. Moscow has traded on its aid 
to increase its military presence in Viet- 
nam, establishing now a major air and 
naval base at Cam Ranh Bay and 
underlining the falseness of Vietnam's 
claim to be a nonaligned nation. 

Even Vietnam's rulers have begun to 
realize that their efforts to control Cam- 
bodia have failed and that they face an 
increasingly difficult situation. In recent 
months Hanoi has tried to demonstrate 
to the world its willingness to reach a 
political settlement. In speeches and in- 
terviews, the Vietnamese Foreign 
Minister has hinted at Hanoi's will- 
ingness to negotiate a settlement at a 
conference and its willingness to con- 
sider peacekeeping activities in Cam- 

Genuine Vietnamese willingness to 
negotiate a settlement in Cambodia 
based upon the principles of the Interna- 
tional Conference on Kampuchea and 
successive resolutions of the United Na- 
tions would be a welcome development, 
above all, for the Cambodian people. But 
Hanoi apparently still views a political 
settlement simply as a means, one more 
tactic, to legitimize its client regime and 
secure it against the threat from the 
Cambodian resistance. Then, Vietnam 
says, it will withdraw the "bulk" of its 
army. The world rejects this concept of 
a settlement and will continue to reject 

It should be noted that Vietnam put 
on its "peace mask" in March of this 

year during its Foreign Minister's trip to 
Indonesia and Australia. Days after his 
return to Hanoi, the Vietnamese Army 
launched its dry season offensive along 
the Thai-Cambodian border. In March 
and April of this year, Vietnamese 
forces launched a series of assaults, 
backed by armor and heavy artillery, 
against the civilian encampments, there 
forcing more than 80,000 people to flee 
to safety inside Thailand. Nearly 50,000 
of these civilians still remain in tem- 
porary encampments, unable to return 
because of the ever-present threat of 
Vietnamese shelling or attack. Even as 
Hanoi talks of a settlement and negotia- 
tions today, the Vietnamese Army is 
building up its forces near Thailand, 
threatening the civilian encampments 
which house 250,000 Cambodians. New 
units have moved up near the border 
and artillery fire continues to threaten 
the residents of these camps. It is an 
ominous harbinger for the coming dry 
season, which may begin only after this 
General Assembly completes its work. 
The world will mark Vietnam's actions 
in Cambodia as well as hear its words. 

In time, the Cambodians' quiet, 
heroic determination will convince its 
leaders that they cannot subjugate the 
Khmer people. We hope that realization 
will lead to a settlement of the Cam- 
bodia problem to the satisfaction of all 
parties, most importantly the Cambo- 
dian people. The way to a fair and just 
settlement has been shown by the inter- 
national community. The General 
Assembly resolutions on Cambodia, the 
1981 International Conference on Kam- 
puchea, and ASEAN's "Appeal for Kam- 
puchean Independence" all outline a 
basis for a comprehensive settlement for 
Cambodia involving complete withdrawal 
of foreign forces, UN-supervised free 
elections and nonintervention and 
noninterference in Cambodia internal af- 
fairs. Such a settlement would 
guarantee a free and neutral Cambodia 
and constitute a threat to none of its 
neighbors. It would also end Vietnam's 
international isolation, restore Vietnam's 
dignity and freedom of action and per- 
mit Vietnam to turn to the task of 
building its own economy and uplifting 
the living conditions of the long- 
suffering Vietnamese people. 

The United States looks forward to 
that day, and in the meanwhile, offers 
its full support to the efforts of the 
Secretary General and his represen- 
tatives, to the ASEAN countries and, 
above all, to the people of Cambodia in 
their struggle. 


"IISUN press release L06 of Oct. 30, 


Department of State Bulletin 


Contadora: A Process 

for Central American Peace 

by Jose S. Sor:ano 

Statement madt in /< • jsiow 

( .\ Gent rat Lsst mbly on Octo- 
ber 25, 1984. 1 Ambassador Sorzano is 

Deputy U.S. i s< ntative 

to /A- I '.',./ Snl ions. 

It has been a year since this body last 
dealt with the Central American ques- 
tion. In that relatively short time, a 
large number of developments — some 
positive, some negative — have taken 
place in the region that merit our review 
and analysis. 

Perhaps there is no better place to 
start this review than with the Con- 
tadora process, given its prominence in 
public attention, its unquestionable inter- 
national support and its potential impact 
on the regional situation. 

U.S. Support for Contadora Process 

U.S. support for diplomatic efforts to 
achieve an effective and lasting peace in 
Central America has been strong, con- 
sistent and continues undiminished. 
Those efforts pre-date the Contadora 
process and go back to the very origins 
of the present crisis, when the United 
States in 1978 sought actively to help 
bring the bloodshed in Nicaragua to a 
halt. They continued when, in October 
1982. the United States participated in 
the elaboration of the San Jose accords, 
whose principles for a peaceful settle- 
ment anticipated the content of the Con- 
tadora Document of Objectives. And for 
nearly 2 years, the United States has 
been represented by a special presiden- 
tial envoy to promote and support 
dialogue both among and within nations 
of the region. 

Addressing a Joint Session of the 
U.S. Congress in April 1983, President 
Reagan authoritatively set forth our 
diplomatic policy toward the region. He 
identified four objectives. 

• The United States will support 
any agreement among Central American 
countries for the withdrawal — under 
fully verifiable and reciprocal condi- 
tions — of foreign military and security 
advisers and troops. 

• We want to help opposition 
groups join the political process in all 
countries and compete by ballots instead 
of bullets. 

• We will support any verifiable, 
reciprocal agreements among Central 
American countries on the renunciation 
of support for insurgencies on neighbors' 

• And, finally, we desire to help 
Central America end its costly arms 
race and will support any verifiable, 
reciprocal agreements on the non- 
importation of offensive weapons. 

As the Contadora process increas- 
ingly occupied center stage of efforts to 
promote dialogue among nations of the 
region, the United States repeatedly 
made its support of that effort clear and 
unequivocal. Following the Declaration 
of the Presidents of Mexico, Colombia, 
Venezuela, and Panama at Cancun, 
July 17, 1983, President Reagan wrote 
these Contadora Presidents on July 21 
to congratulate them on their efforts to 
promote dialogue in Central America. 
The President wrote that, "my govern- 
ment has consistently expressed strong 
support for the Contadora process. The 
Cancun Declaration, by articulating the 
crucial issues which must be treated to 
reach an effective and enduring resolu- 
tion of the Central American conflict, is 
an important contribution to advancing 
that process." 

Following agreement by the five 
Central American nations on September 
9, 1983, on the Contadora Document of 
Objectives, the U.S. Government took 
the position that the document 
represented a comprehensive statement 
of the issues which must be addressed 
and declared it "an excellent basis for 
continued regional negotiation." We 
have in innumerable instances stated our 
view that the Document of Objectives 
constitutes a sound outline of an effec- 
tive agreement and that we support its 
comprehensive and verifiable implemen- 

That support has been consistently 
expressed at each stage of the Con- 
tadora process. We welcomed the agree- 
ment of January 8, which created work- 
ing commissions to develop recommen- 
dations for the implementation of the 
Document of Objectives. On June 1 of 
this year, at the request of the President 
of Mexico, acting on behalf of the Con- 
tadora Group, Secretary of State 
[George P.] Shultz initiated a series of 
high-level bilateral discussions between 
Nicaragua and the United States, in sup- 
port of the Contadora process. Vice 

Minister of Foreign Affairs Victor Hugo 
Tinoco and U.S. Special Fnvoy Am- 
bassador Harry Shlaudeman have now 
held six rounds of talks in that series 
and further meetings will be taking 
place. Ambassador Shlaudeman has, ad- 
ditionally, consulted repeatedly with all 
participants in the Contadora process. 

When the Contadora participants 
had under consideration a second draft 
agreement, the revised acta of 
September 7, Secretary of State Shultz 
characterized this draft as a positive 
development in a continuing negotiating 
process. Comments on the revised draft 
acta were submitted by the Central 
American states as requested by the 
Contadora Group on October 15. The 
comments of some of the Central 
American countries are a matter of 
public record. They clearly indicate a 
strongly favorable attitude toward the 
acta and that the effort to make the acta 
an effective and comprehensive im- 
plementation of the Contadora Docu- 
ment of Objectives should continue. 

The preceding should suffice to 
demonstrate that the United States 
regards the Contadora process as offer- 
ing the most appropriate forum and the 
best hope for achieving a verifiable and 
comprehensive solution to the problems 
of the region. It is a regional effort to 
solve a regional problem, free from out- 
side interference. As that negotiating 
process now goes forward, our support 
continues undiminished. The Contadora 
Group's draft resolution now before us, 
General Assembly document A/39/L.6, 
exemplifies such efforts to achieve 
peace, and the United States is prepared 
to support it. 

In affirming our support for the 
process, and in applauding the efforts of 
the nine participating countries, we note 
with approval the express determination 
of those countries to continue this effort 
until a document has been achieved 
which reflects the views and needs of all 
the countries in the region. Since this 
final document will have been drafted to 
accommodate the views and needs of 
these countries of the region, they will, 
of course, be the appropriate signatories 
of the document. 

Contadora Democracies Established 

The establishment, strengthening, and 
protection of democracy is an explicit 
and essential component of the Con- 
tadora formula for a Central American 
regional solution. So it is entirely ap- 
propriate that the Contadora countries 
themselves are democracies. One of the 

January 1985 



principal goals put forward in the Docu- 
ment of Objectives signed in September 
1983 by the Contadora Four and all five 
Central American governments, is: "To 
adopt measures conducive to the 
establishment and, where appropriate, 
improvement of democratic, representa- 
tive, and pluralistic systems that will 
guarantee effective popular participation 
in the decision-making process and en- 
sure that the various currents of opinion 
have free access to fair and regular elec- 
tions based on the full observance of 
citizens' rights." 

A related objective, agreed to at the 
same time by the nine participants in 
the Contadora process, is: "To promote 
national reconciliation efforts wherever 
deep divisions have taken place within 
society, with a view to fostering par- 
ticipation in democratic processes in ac- 
cordance with the law." 

Against the expectations of skeptics 
and pessimists and despite the desperate 
opposition of groups determined to use 
violence to frustrate the popular will, 
Central America is undeniably undergo- 
ing a profound democratic transforma- 
tion fully compatible with these Con- 
tadora objectives. My delegation is 
pleased to note the recent dramatic 
progress in Central America toward em- 
powering the people to choose, establish, 
and develop democratic governments. In 
1982, the then military government of 
Honduras peacefully relinquished power 
to permit free and fair elections for a 
new president and national assembly, 
which were duly and constitutionally 
elected and continue to govern the coun- 
try democratically despite grave eco- 
nomic problems and deliberate destabili- 
zation attempts from neighboring 
Nicaragua. This determination to con- 
tinue on the path of democracy — rather 
than Nicaragua's purely verbal and prop- 
agandistic expressions of support — is 
what demonstrates Honduras' accept- 
ance of the Contadora objectives. 

The year 1982 also saw the military 
reform junta in El Salvador presided 
over by Jose Napoleon Duarte, peace- 
fully give up power to permit free and 
fair elections for a constituent assembly 
that was charged with drafting a new 
• 'institution and choosing a provisional 
president. The winner in the constituent 
assembly elections was not Mr. Duarte's 
party but a coalition of the opposition, 
which elected its own leader as assembly 

ker and also chose the provisional 
president. Just this year, the Salvadoran 
people again were allowed to vote, this 
time, directly to choose their president. 
The contest was vigorous; there was 
robusl competition among many parties. 

No candidate received an absolute ma- 
jority in the first round of voting. Only 
after a spirited runoff campaign was a 
new Salvadoran president, Mr. Napoleon 
Duarte, chosen. 

In the Salvadoran elections, which 
were observed by representatives of 60 
nations and international organizations, 
and 800 journalists, the Salvadoran peo- 
ple took considerable risks for the sake 
of establishing a democratically elected 
popular government. Candidates and 
voters alike participated in the elections 
under threats of violence from the 
Marxist-Leninist guerrillas seeking to 
dominate El Salvador by military force. 
To demonstrate the deadly seriousness 
of their threats, the guerrillas stepped 
up their campaign of violence against 
civilians during the electoral campaign. 
Some assembly members were murdered 
by the guerrillas as a "response" to the 
election process. Roads were mined, 
buildings were bombed, bridges were 
dynamited in the effort to impede the 
elections. Despite these acts of murder 
and sabotage, 75% of the eligible voters 
voted. Under these circumstances, there 
can be no question as to who supported 
Contadora's objectives and who did not. 

The same is true with respect to the 
courageous offer of President Duarte to 
go unarmed to meet and seek concilia- 
tion with the commanders of the in- 
surgents of his country. With the whole 
world watching, the meeting took place 
peacefully in the church at La Palma, 
with the mediation of the Archbishop of 
San Salvador, Monsignor Rivera y 
Damas. President Duarte's objective in 
the meeting was precisely what I have 
cited from the Contadora Document of 
Objectives: "To promote national recon- 
ciliation efforts" where "deep divisions 
have taken place within society, with a 
view to fostering participation in 
democratic processes in accordance with 
the law." 

Guatemala also has taken significant 
steps toward establishing a constitu- 
tional, popular and democratic govern- 
ment. Just a few months ago, the people 
of Guatemala peacefully, freely, and fair- 
ly elected a constituent assembly that 
promises to prepare the way for 
presidential elections next year. That, 
too, is progress toward the Contadora 

Finally, in 1982, the people of Costa 
Rica continued their proud and ad- 
mirable tradition of nearly four decades 
of uninterrupted rule by popularly 
elected governments by electing a new 
president. And in this most recent elec- 
tion, as in every election but one since 
the HMOs, the president elected was of 
the opposite party from that of the 

president he replaced. Needless to say, 
no better example of the democratic 
spirit embodied in the Contadora objec- 
tives can be found. 

The record is clear that three of the 
five Central American nations now have 
democratically chosen civilian govern- 
ments, and that one other has taken 
concrete steps toward establishing 
democratic, civilian rule while promising 
unambiguously to follow through to the 
completion of that process next year. 
The recent elections in these four 
republics met the key criteria for 
authentically democratic elections: They 
permitted open competition under condi- 
tions of free speech, press, and 
assembly. They were inclusive: large, 
nearly universal portions of the adult 
populations of these countries were eligi- 
ble to participate. And their results were 
definitive: that is, the outcome of the 
votes largely determined the partisan 
composition of the governments. 

Nicaraguan Elections: Fair or Farce? 

In contrast to the other Central 
American nations, Nicaragua is openly 
defying both Contadora and the move- 
ment toward democratic, civilian, and 
constitutional government evident 
throughout the region. As an outward 
symbol of its contempt for civilian 
government, the Sandinista leaders not 
only prefer to be addressed by the 
military title of comandante but even ap- 
pear before this General Assembly in 
full military regalia. 

We must confess we were not sur- 
prised. For a number of years, my 
delegation has been pointing to the ac- 
cumulating evidence indicating the real 
nature of the Sandinista regime. 

Indeed, the unelected military rulers 
of Nicaragua have a longstanding record 
of ideological contempt for free, fair, in- 
clusive, and competitive, democratic 
elections in their own country and their 

Although 1 month before they 
achieved power in 1979, the Sandinista 
leaders promised the Organization of 
American States that they would hold 
free elections after assuming power, 
they quickly reneged on that promise 
and have never shown the slightest gen- 
uine inclination to implement it. 

Early in 1980, the Sandinistas con- 
solidated their control over the Council 
of State, enlarging it and packing it with 
their own supporters to ensure a perma- 
nent majority. In July 1980, Sandinista 
Defense Minister Humberto Ortega an- 
nounced that there would be no need for 
elections since the people had already 


Department of State Bulletin 


"voted" during the revolution. "Elee- 
tions." he ominously declared, "could not 
be held until the people had been re- 
educated.' " 

The following month, in August 
1980, Humberto Ortega announced that 
elections would be put off until 198"). 
Even then, it was said, these would not 
be "bourgeois" elections— which I take 
to mean the kind of authentically 
democratic elections called for in the 
Contadora objectives and in the Univer- 
sal Declaration of Human Rights— but 
"people's" elections. Power "will not be 
raffled off." insisted the Sandinista In- 
terior Minister, Tomas Borge. 

On August li. r ). 1981, Humberto 
Ortega remarked in a speech to the 
military: "We have not promised the 
elections that they (the bourgeoisie) 
think we are going to promote, and we 
are never going to discuss power, as we 
have already said on other occasions, 
because this power was taken by the 
people through arms, and here the 
power of the people will never be ques- 

Three years later, after enormous 
international pressure, national elections 
were scheduled for this coming 
November 4, in Nicaragua. But how do 
the military rulers of Nicaragua conceive 
of these elections? Here is what a 
member of the military junta, Bayardo 
Arce, said in May 1984. 

What a revolution needs is the power to 
enforce. This power to enforce is precisely 
what constitutes the defense of the dictator- 
ship of the proletariat — the ability of the 
class to impose its will using the instruments 
at hand, without going into formal or 
bourgeois details. From that point of view, 
the elections are bothersome to us. 

At the same time, Comandante Arce 
predicted that following the certain San- 
dinista victory in the November elec- 
tions, the Sandinistas would remove the 
"facade of political pluralism" and 
establish "the party of the revolutionary, 
the single party." 

In view of all these antidemocratic 
statements emanating from several com- 
andantes, no one should be surprised 
when the November 4th "elections" in 
Nicaragua turn out to be a farce in- 
capable of deceiving even those few who 
still harbor hopes that the comandantes 
will turn out to be the genuine demo- 
crats after all. 

How can these elections be deemed 
democratic? Who can claim that they 
comply with Contadora? To put it sim- 
ply, conditions for free and fair elections 
in Nicaragua do not exist. All the news 
media are controlled by the Sandinistas 

with the except ion of the newspaper Lit 
!'•< nsa, which is routinely censored, and 
the radio of the Catholic Church, which 
is forbidden to broadcast political 
material. There is evidence that the 
draconian military draft is being used as 
a means of intimidating supporters of 
the political opposition. The electoral 
council created to administer the elec- 
tions is completely dominated by 
members of the Sandinista Party. 
Vigilante mobs — the infamous 
"turbas" — have been encouraged to, and 
do intimidate the opposition. And the 
most representative elements of 
democratic opposition simply are not be- 
ing allowed to participate in the elec- 
tions. The principal opposition alliance, 
the Coordinadora Democratica, had 
asked to have its candidates placed on 
the ballot, but only if certain essential 
conditions were met. These included 
commonplace conditions for democratic 
contests such as: an end to press censor- 
ship, suspension of martial law, separa- 
tion of the state from the Sandinista 
Party, and an amnesty law to allow all 
Nicaraguan citizens to participate in the 
electoral process. The conditions were 
refused, and the Coordinadora, not 
wishing to be a part of a farcical elec- 
tion, refrained from registering for 
places on the ballot. 

Religion and Human Rights Under 
Sandinista Rule 

Many other aspects of the situation in 
Nicaragua are gravely at odds with the 
Contadora objectives of regional peace, 
social well being and internal 
democracy. One of these is intense 
religious intolerance. The Roman 
Catholic Church, of which a majority of 
Nicaraguans and other Central 
Americans are members, is suffering 
persecution. Faithful clergymen are be- 
ing intimidated by the violence of "tur- 
bas divinas;" even Pope John Paul was 
rudely mocked by Sandinista operatives 
when he visited Nicaragua last year. 
When the military regime summarily ex- 
pelled 10 Catholic missionary priests 
from the country in July of this year, 
the Archbishop of Managua, Monsignor 
Obando y Bravo, remarked: "We want to 
state clearly that this government is 
totalitarian. . . . We are dealing with a 
government that is an enemy of the 
Church." The Archbishop of San Jose in 
Costa Rica, Monsignor Roman Arrieta, 
received the expelled priests into his 
country in a poignant ceremony and 
declared: "There were still in the world 
men and women of good will, who did 

not believe a totalitarian regime had en- 
throned itself in Nicaragua. Now those 
people know the truth." 

The Nicaraguan delegation is fond of 
quoting The New York Times in their 
statements. Let me also quote from the 
Times. Just today the Times carries a 
front page article quoting Nicaraguan 
Bishop Pablo Antonio Vega's statement 
that, "It is said and repeated that all 
these calamities and wars are caused 
only by foreign aggression of an im- 
perialism that is the enemy of humanity. 
The people, for their part, ask: To what 
imperialism belong those who impose a 
regime that plunders, jails and issues 
constant calls to arms? Who has decided 
this? Who has made the choice to move 
from one system to another . . . ? 
. . . Why do they wish to impose by 
force and deceit, ideologies which, good 
as they may be, are not accepted by the 
people? Why are we offered only new 
oppressions and more serious confronta- 
tions? Is this not the basic cause of our 
growing internal weakness?" Anyone 
that has followed Nicaraguan devel- 
opments the last few years will have no 
difficulty answering those questions. 
Certainly, the Nicaraguan people have 
no doubts about how to answer them. 

Minority religious communities in 
Nicaragua have also suffered under the 
Sandinistas. Virtually the entire Jewish 
community of Nicaragua has fled the 
country since the Sandinistas took over. 
Moravians and evangelical Protestants, 
who make up a large proportion of the 
Miskito Indian population, are also being 

My delegation has addressed this 
Assembly before on the matter of the 
gross violations of human rights commit- 
ted by the Sandinistas against the 
Miskito, Sumu, and Rama tribes of in- 
digenous peoples of Nicaragua's Atlantic 
Coast. These Sandinista practices, in- 
cluding forced relocation into concentra- 
tion camps, destruction of villages, 
homes and livestock, and violence 
against civilians, have elicited the grave 
concern of the Inter-American Commis- 
sion on Human Rights. 

The militarization of Nicaragua 
under the Sandinistas is a concrete 
threat to the peace of the entire region. 
Since 1979, Nicaraguan-trained military 
forces have increased from 10,000 to 
over 100,000. This is an extraordinary 
level of militarization for a country with 
a population of only 2.8 million. San- 
dinista armed forces outnumber the 
combined armed forces of all of the 
other Central American countries. 

January 1985 



Despite the Sandinistas clear anti- 
democratic intentions, their violations of 
human rights, their denial of social and 
political pluralism, their continuing 
subversion of neighboring countries, 
their frenetic arms buildup, and their 
harboring of thousands of foreign troops 
and advisers, the Sandinista regime 
shamelessly declares its support for Con- 
tadora and cynically proclaims its inten- 
tion to sign the Contadora acta as it 
now stands. Of course they will. But 
then they will sign anything and promise 
anything that will perpetuate their 
power and privilege. 


This expediency in the pursuit of power, 
this reliance on military means to 
dominate a resisting populace, this 
ostentatious fascination with military 
titles, symbols, and uniforms sadly 
reminds us of the era of military dic- 
tatorship the world had hoped 
Nicaragua had already transcended. 
Regrettably, this is not the case and that 
is why in recent weeks crowds of 
Nicaraguans that have perceived the 
real nature of the Sandinistas have been 
heard in the city of Corinto chanting the 
slogan, "El Frente y Somoza son la 
misma cosa" ("The Sandinistas and 
Somoza are the same thing"). 

The people are seldom deceived and 
the Nicaraguans are no exception. They 
see their Sandinista rulers living in lux- 
ury in former Somoza mansions enjoying 
privileges denied their fellow citizens 
and partaking of sumptuous meals when 
mothers see their children grow hungry 
for lack of milk. So it is not suprising 
that remembering the inequalities of the 
Somoza regime the Nicaraguans today 
shout that, "El Frente y Somoza son la 
misma cosa." 

The people remember. Somoza 
repressed political freedoms; censored 
La Prensa; jailed, tortured, and 
murdered his political opponents; and 
generally intimidated the population into 
political acquiescence. But the San- 
dinistas today are doing exactly the 
same thing and, naturally, the 
Nicaraguan people have concluded that 
"El Frente y Somoza son la misma 

Lei the Sandinistas, too, remember. 
Lei them remember the fate of Somoza 
because, if the long-suffering 
Nicaraguan people are equating the San- 
dinistas' Front, with the Somoza regime, 
ire likely to take the same 
ires with the Frente that they 
previously took with Somoza. 

Freedom of the Press: 
The Need for Vigilance 

by Gregory J. Newell 

Address before the Inter-American 
Press Association general assembly in 
Los Angeles on October 30, 1981*. Mr. 
Newell is Assistant Secretary for Inter- 
national Organization Affairs. 

It is a pleasure to speak to an audience 
with which one shares fundamental con- 
victions and common values. Ours is a 
common belief in the freedom of the 
press and the principle that information 
should freely flow, even across national 

The Government of the United 
States is appreciative of the distin- 
guished record of the Inter-American 
Press Association (IAPA). You have 
sought to unify the print media in the 
Western Hemisphere to combat threats 
to press freedom. You have gained the 
respect of this Administration. 

We applaud the efforts of IAPA to 
intervene on behalf of imprisoned jour- 
nalists. We also applaud your attempts 
to persuade those countries with press 
restrictions that they should lift such 
controls, or at least begin to lessen 
them. We applaud, too, the fact that you 
have sent delegations to Paraguay, 
Uruguay, Peru, and Argentina in recent 
years. Though the paper La Prensa in 
Managua remains subject to censorship, 
the editor gives credit to you for the 
fact that the Nicaraguan Government 
has permitted publication to continue. 
Your ongoing watchdog role of examin- 
ing the status of press freedom in the 
Western Hemisphere every 6 months 
has had a restraining effect upon 
governments. Thanks to you, they do 
realize that the world would be informed 
of any restrictive actions. 

As we are all aware, journalism is a 
dangerous profession. Your own presi- 
dent, Horacio Aguirre, was a fugitive 
from oppression. He has been a valiant 
warrior in the never-ending struggle 
against those who seek to use the press 
to aggrandize their governments — when 
they should instead pursue truth. There 
are other heroes in the press of the 
Americas: Pedro Chamorro, editor of La 
Prensa (Nicaragua); Stephen Schmidt, 
formerly of the Tico Times (Costa Rica); 
and Aldo Zucollilo, publisher of ABC 
< 'olor (Paraguay), to name but a few. In 
1983, according to Freedom House, 14 

journalists were killed and 10 threatened 
with death, 4 were kidnaped, 80 ar- 
rested, and another 24 were beaten or 
saw their offices bombed. 

UNESCO's Efforts to 
License the Press 

Yes, journalism is a dangerous profes- 
sion. But in the name of offering "pro- 
tection," there are those who are now 
proposing measures that would put a 
governmental noose around journalists' 
necks. More dangerous, however, is the 
threat that this poses to the fabric of a 
democratic society. This is the real 
danger posed by the ill-advised course 
that some seem intent upon pursuing in 
various international organizations such 
as UNESCO [UN Educational, Scientific 
and Cultural Organization]. 

Despite the fact that the report of 
UNESCO's own MacBride commission 
strongly opposed the creation of special 
privileges designed to "protect" — on ac- 
count of the dangers inherent in any 
such licensing system — UNESCO con- 
tinues, year after year, to include in its 
activities the preparation of studies and 
the convening of conferences concerned 
with the "protection of journalists" — a 
mere euphemism for the licensing of 
journalists. Inevitably, as the MacBride 
report pointed out, a regimen that of- 
fered "protection" to journalists would 
require that somebody stipulate who it is 
that would be entitled to that "protec- 

Licensing of journalists is a virus 
that seems particularly to infect Latin 
America. There are at least 11 countries 
in the region so afflicted — that are 
favorably inclined toward the proposals 
for licensing that have been current in 
UNESCO for over a decade. 

To review a bit of this history: the 
MacBride commission report of 1980 
soundly rejected licensing as a protective 
device. At a UNESCO conference in 
1981— from which U.S., Canadian, and 
West European representatives had 
originally been excluded — a plan to set 
up a new international agency for the 
"protection" of journalists was advanced. 
Following a strong protest by the U.S. 
Department of State, four Western rep- 
resentatives were finally permitted to 
attend. The plan had apparently been 

relea e 100 of Oct. 25, 
iry remarks omitted here. 


Department of State Bulletin 


It was there contemplated that an 
international commission would issue in- 
ternational press identity cards, but 
would also ensure that correspondents 
"conform to accepted rules for profes- 
sional ethics." The Western group saw in 
these proposals yet another attempt to 
license journalists working abroad and 
yet another ploy by UNESCO to control 
press freedom. 

Following the meeting, our mission 
in Paris told UNESCO's Director 
General, Amadou-Mahtar M'Bow, that 
the Secretariat's treatment of the issue 
of protection of journalists had touched 
a sensitive nerve in the United States. It 
is quite clear that this precipitated adop- 
tion of the Beard amendment, a con- 
gressional declaration that U.S. funding 
for UNESCO was to be cut off if the 
organization "implemented" certain pro- 
posals calculated to restrict a free press. 
The Director General was informed that 
the continuation of such behavior would 
make it difficult for our government to 
believe that UNESCO was genuinely in- 
terested in working constructively to im- 
prove relations with the United States. 

The Director General then promised 
that all future meetings of this kind 
would be open, and that if there is no 
desire among journalists for protection, 
as the West insists, then he would 
recommend that UNESCO drop the idea 
of "protection" from its program. 

But these proposals have not been 
dropped from the UNESCO program. 
The Prague-based International 
Organization of Journalists (10 J), which 
claims to represent 400,000 journalists 
around the world — though I suspect it 
does not speak for members of this 
group at all— keeps pushing for "protec- 
tion." UNESCO responds by including in 
its activities each biennium an accom- 
modating series of studies and con- 

No such program has yet come to 
fruition. But our central concerns re- 
main the same. We obviously have not 
yet derailed these activities, and we con- 
tinue to wonder whether it is not just a 
matter of time before like proposals are 
put back on the track— under a full head 
of steam. 

Now we find an additional confirma- 
tion of UNESCO's unrelenting intent to 
regiment the press — in "The World Con- 
ference on Working Conditions and 
Security of Journalists," financially and 
ideologically supported by UNESCO, to 

be held in Mexico City, March 18-25, 
1985. UNESCO's Secretariat, uni- 
formed, seems to pay no attention to 
U.S. and Western sensitivities on this 
highly controversial matter. 

A meeting to plan this conference 
was held in Geneva on July 5-6, 1984. 
The organizers of the 1981 conference 
appeared once again among the spon- 
sors of the proposed 1985 conference: 
the International Organization of Jour- 
nalists, FELAP (the IOJ Latin Amer- 
ican affiliate), the International Catholic 
Union of the Press, UNESCO, the 
Union of African Journalists, the Inter- 
national Labor Organization (ILO), the 
International Committee of the Red 
Cross, and the Brussels-based Interna- 
tional Federation of Journalists (IFJ). Of 
these, only the IFJ has a membership 
that includes Western journalists; 
Western journalists were otherwise ex- 
cluded from planning meetings. 

Our government has formally ques- 
tioned the involvement of the ILO and 
the Red Cross in this conference. As an 
expression of our concern, I have writ- 
ten to and spoken personally with Fran- 
cis Blanchard, Director General of the 
ILO, and have written and placed a call 
to Alexandre Hay of the Red Cross, to 
inquire as to their cosponsorship of this 
event. We also expressed our concerns 
to UNESCO at the recent executive 
board meeting in Paris. The American 
Newspaper Publishers Association has 
also represented to Mr. Hay that the 
Red Cross might prudently reconsider 
its sponsorship, in light of the history 
we here recall. 

Although the last UNESCO general 
conference approved a meeting of ex- 
perts to examine the working conditions 
of foreign correspondents to gain a bet- 
ter understanding of the difficulties they 
encounter, the agenda for the 1985 con- 
ference goes much further. It proposed 
to take up "responsibilities and ethical 
standards for journalists," "protection of 
journalists," "working conditions for 
foreign correspondents," and "implica- 
tions of the new technology." 

The sponsoring organizations appear 
to expect UNESCO to pay for pre- 
paratory studies on these topics, and, in- 
deed, UNESCO supplied funding to hold 
a second planning meeting last month in 

At this second meeting the agenda 
was modified to include the status, 
rights, and responsibilities of journalists 
(including definition of what constitutes 
a journalist) and the safety of journalists 
on dangerous missions. The items on 
new technology and working conditions 
for journalists were dropped from the 
agenda. FELAP, the Latin American af- 
filiate of the International Organization 
of Journalists, is to prepare a paper on 
the protection of journalists. Is it merely 
coincidental that the same person who 
wrote a background paper for the 1981 
UNESCO meeting is to write a paper 
for this meeting on the status, rights, 
and responsibilities of journalists? 
He is Hifzi Topuz, former director of 
UNESCO's Free Flow of Information 

Is it only coincidental, too, that 
Danilo Aguirre, the Secretary General of 
FELAP — which, as an organization, is 
the principal organizer of the Mexico 
meeting — has indicated that protection 
of journalists should include establish- 
ment of a commission to issue identity 
documents to journalists — the very pro- 
posal that was rejected at the 1981 con- 

Finally, to note a third suggestive 
"coincidence," free press groups will 
again be excluded from voting status at 
the Mexico City conference, i.e., the 
representatives of FIEJ, IPI, WPFC, 
and IAPA will be able to attend only as 
observers. 1 The rationale given is that, 
since this is a conference on working 
conditions, only international unions are 

On this rationale, presumably, the 
International Committee of the Red 
Cross was invited. It does have 
humanitarian concerns, but ought not 
lend itself to this unrelenting effort to 
"protect" journalists as NWICO [New 
World Information and Communication 
Order] advocates wish to "protect" them. 

The fact that the UNESCO Secre- 
tariat has been involved in planning and 
financing the preparations for this 
meeting illustrates once again that the 
Secretariat is insensitive to the serious 
concerns shared by all who are here 
today. May I suggest that the 
Secretariat is more than merely insen- 
sitive. It is disdainful of our sensibilities. 

UNESCO's active involvement in 
planning such as this constitutes a 
breach of the promises made to us by 
the Director General with respect to 

January 1985 



nonexclusivity in composing meetings 
that deal with highly controversial 
issues. The Secretariat knows full well 
that UNESCO efforts aimed at licensing 
journalists under the guise of "protec- 
tion" will be perceived by the United 
States as a direct challenge to our deep- 
ly held values and vital national in- 

NWICO's Dangerous Panaceas 

UNESCO must understand, but appears 
not yet to comprehend, that its constant 
call for the establishment of a New 
World Information and Communication 
Order gives us great concern. The 
NWICO, frankly, however much it might 
be thought to embody legitimate aspira- 
tions, is based on fallacious assumptions 
and prescribes dangerous panaceas. 

In the best known version of 
NWICO, submitted to the MacBride 
commission (of which the then-incum- 
bent Tunisian Minister of Information, 
Mr. Moustapha Masmoudi, seems to be 
the principal author), there appear 
demands for: 

• Regulation of the right of access 
of information; 

• Definition of appropriate criteria 
to govern "truly objective news 

• Regulation of the collection, proc- 
essing, and transmission of news and 
data across national boundaries; 

• Imposition of duties and respon- 
sibilities on the media; 

• Establishment of a supranational 
tribunal to monitor media behavior; 

• Implicit limitations on the adver- 
tising and activities of transnational cor- 
porations; and 

• Enforcement of a right of reply 
and rectification for alleged inaccuracies. 

Were we to accept Mr. Masmoudi's 
version of an NWICO, we would be ac- 
cepting the idea of state control over all 
news and over all information coming in 
and out of any country. We would 
thereby be sanctioning censorship, 

too— and this we will not do. We also 
mean to guard against lesser annoy- 
ances. As Ellie Abel, an insightful 
American journalist, puts it, any im- 
plementation of the proposed NWICO 
would create an unwanted "international 

Higher standards of truthfulness, ac- 
curacy, and respect for human rights 
cannot be imposed by decree or by inter- 
national regulation. To the extent they 
are lacking, they must come from the 
journalistic profession itself, as working 
journalists give honest effort, display 
enhanced sensitivity, and commit them- 
selves to the attainment of their own 
praiseworthy ideals of fair treatment. 

It is true that UNESCO has not yet 
implemented an international code of 
journalistic ethics, nor created a licens- 
ing system for journalists. And it is true 
that UNESCO resolutions have no force 
in law. Sanctions that UNESCO is 
tempted to validate, however, by con- 
stantly entertaining them in that forum, 
can lend respectability to actions that 
could be taken, with effect, by potential- 
ly repressive governments— as we have 
already witnessed. 

U.S. Commitment to a 
Free Press 

Let me reiterate the Reagan Adminis- 
tration's firm commitment to the values 
of a free press. 

• We will reject any moves to give 
to nations a duty to control or supervise 
the media, making journalists comply 
with "standards" promulgated by in- 
tergovernmental agencies or by govern- 

• We will oppose interpretations of 
an NWICO that could make govern- 
ments the arbiters of media content. 

• We will oppose false interpreta- 
tions that would place the blame for 
communications imbalance on the 
Western media. 

• We will oppose interpretations 
that seek to translate biases against our 
free market and our free press into 
restrictions on Western news agencies, 
advertisers, or journalists. 

• We will strongly and actively en- 
courage others to do the same. 

In sum: we will continue to defend 
these values, whenever and wherever 
they are challenged or put in jeopardy. 

The uncompromising positions taken 
by the Reagan Administration against 
threats to the principles of a free press 
have been joined by the support of the 
Congress, the concerned public, and the 
private media. 

These firm positions of the U.S. 
Government— together with that forceful 
support for free flow of information 
rightly praised by President Reagan in 
his September 24, 1984, speech to the 
UN General Assembly— will surely have 
some effect on deliberations in interna- 
tional forums such as UNESCO. 

As we are proud of your support for 
the values of a free press in all the 
Americas, so are we proud of the genius 
and fortitude of our own Thomas Jeffer- 
son, who, early in the history of this 
Republic, stood forth in bold defense of 
these values. He acted as he spoke— not 
once, but again and again and again— 
and with an effect for all time. His 
words and his deeds continue to remind 
us all that eternal vigilance is the price 
of liberty. We, too, must remain 

'FIEJ — Federation Internationale des 
Editeurs de Joumaux et Publications; 
IPI — International Press Institute; 
WPFC— World Press Freedom Committee. 


Department of State Bulletin 


The Resurgence of Democracy 
in Latin America 

Seen lory Shultz's address before the 
■ hlii of the Organization of 

■>ld a neWS confer. 

■-■' ■•. Brazil, on November u. 

The resurgence of democratic govern- 
ment in this hemisphere is a natural 
foundation for mutual understanding 

and improved cooperation. And I believe 
our common strength will increase the 
more consistently we apply our demo- 
cratic principles— the more we provide 
good government as well as free elec- 
tions and economic opportunity as well 
as political competition. 

The challenges are awesome. But 
great ideas can be turned into great 
achievements. This visionary capital of 
Brasilia is proof enough of that. And 
democracy can help us to turn our 
greatest visions into achievements. 

We can, I believe, show that 
freedom, social justice, and economic 
development are mutually reinforcing 
and not mutually contradictory as our 
communist adversaries claim. We can 
show that democracies can combat anti- 
social violence such as terrorism and 
narcotics trafficking more successfully 
than dictatorships or regimes that rely 
on force. And we can show that the 
strength of democracy is the path to 
peace, at home and abroad. 

In the last 4 years, counting all the 
countries of this hemisphere, almost one- 
third of a billion people have voted in 
some three dozen national elections in 
27 countries. That is more people voting 
in more elections in more countries than 
ever before in the history of this 

This resurgence of democracy has 
been both qualitative and quantitative. 
Three tests determine whether elections 
are genuine instruments of democratic 
accountability. They are participation, 
competition, and freedom. 

• Participation has increased 
dramatically in almost every country 
since the 1960s. In some, the proportion 
of adults voting has doubled. 

• Competition is also a steadily 
broadening norm. From Argentina to 
the United States, from Grenada to 
Ecuador, the choices offered voters have 
been real ones. 

• Freedom is the ingredient that 
makes participation meaningful and 
competition genuine— freedom from 
coercion and fear; freedom of speech 
and of the press; freedom of assembly; 
freedom to choose. 

Because it fully expresses their in- 
terests and idiosyncracies, democracy 
protects the distinctiveness of our 
peoples and nations. It is a means of 
managing differences without depending 
on force. It is a means of enhancing in- 
dividuality through freedom, and, 
therefore, democracy also creates 
powerful bonds among nations. Rela- 
tions among democracies are more com- 
plex but more peaceful. Democratic 
governments listen to their peoples' 
voices, and agreements, once reached, 
have the strength that comes from 
popular support. 

For much of the past generation, 
there has been a tendency to focus on 
what divides the peoples and nations of 
the Americas. We all know the refrains 
of division and doubt: north or south; 
poor or rich; Anglo or Latin; debtor or 
creditor; black or Indian; oil exporter or 
oil importer. Differences there are, but 
these litanies ignore more powerful 
realities: we are united by geography; 
we are united by the course of history; 
and we are united by choice— by the 
respect for individual decisions that are 
at the core of democracy and the secret 
of its success. 

In short, democracy is a means of 
building strength out of diversity. The 
United States finds it easier to 
cooperate with nations that are 
democratic. And today, more OAS 
members are practicing democracies 
than ever before. 

The Central American Conflict 

Let me turn to the subject of ending the 
Central American conflict. 

The apostles of the violent left 
preach that armed revolution is 
necessary to change society for the bet- 
ter. The apostles of the violent right 
answer that repression is necessary to 
preserve civilization. But the distin- 
guished Peruvian novelist, Mario Vargas 
Llosa, is right when he reminds us that 
to believe that violence is unacceptable 
in Europe and the United States but is 
perfectly all right in Latin America or 
the Caribbean is to accept a shoddy and 
shameful double standard. No one 

should underestimate the capacity or the 
determination of all Americans to 
govern themselves peacefully. 

For Central America, the democratic 
resurgence we are witnessing through- 
out the Americas is a particular source 
of hope. In the United States, Europe, 
and other industrial democracies, there 
is a new appreciation that democracy 
can help Central America to develop in 
peace and in accordance with its own in- 
terests. Liberals and Conservatives, 
Christian Democrats and Democratic 
Socialists— the fundamental political 
groupings of the West— have all been 
impressed by El Salvador, disillusioned 
by Nicaragua, favorably surprised by 
Guatemala, encouraged by Honduras, 
and continually reminded by Costa Rica. 

The participants in the Contadora 
process have formally identified national 
reconciliation in a democratic framework 
as a requirement for an enduring peace 
in Central America. The agreed Con- 
tadora objectives underscore the need to 
defend democracy where it is threat- 
ened, to help build democracy where it 
does not now exist, and to resist the 
abridgment of democracy from whatever 
quarter. Recent treaty drafts reject ter- 
rorism, guerrilla activity, or any other 
usurpation of power outside a 
democratic framework. 

But it is easy to proclaim one thing 
and to do another. This past September, 
the Nicaraguan Government announced 
that it was prepared to sign the Con- 
tadora draft at the very time that it was 
refusing to ensure that its elections 
would be free and competitive. In 1979, 
the OAS formally called for the holding 
of free elections in Nicaragua as soon as 
possible. We are still waiting. 

We all know that good words will 
not guarantee that armed opposition 
groups will be integrated into a genuine- 
ly democratic political system. And we 
all know that promises will not be 
enough to guarantee that one nation is 
not a military threat to another. Prom- 
ises will not reduce an already danger- 
ous military imbalance that is constantly 
fed from outside this hemisphere. Credi- 
ble verification and control mechanisms 
will be necessary to ensure that 
whatever is agreed will actually be im- 

A workable Contadora agreement, 
one that does what has been pro- 
claimed—credibly and verifiably— would 
be a benchmark for this hemisphere and 
for the world as a whole. The United 
States pledges its continued support to 
achieving such an agreement. 

January 1985 



An example of the Contadora spirit 
at work is today's El Salvador. Presi- 
dent Duarte's bold and courageous La 
Palma initiative represents the kind of 
skilled and democratic leadership 
necessary to move armed conflict 
toward peaceful resolution. It was possi- 
ble because of the legitimacy of his 
government— based upon an electoral 
mandate and a governing consensus. It 
is a demonstration of how democracy 
can work to address the most pressing 
problems of society, even under the 
most difficult conditions. It can serve as 
a lesson for us all. 

The Struggle Against 
Terrorism and Drugs 

Let me turn now to the problem re- 
ferred to by earlier speakers already of 
stopping the terrorists. 

The struggle between civilization 
and barbarism— the leading 19th-century 
definition of the struggle for free- 
dom—is today the struggle between 
democracy and terrorism. Democracy is 
civilization in the modern era. Terrorism 
is the new barbarism. Democracy builds. 
Terrorism destroys. 

Whatever causes they profess, all 
terrorists have the same overarching 
goal: to impose their will by force and 
intimidation. Terrorism is not simply a 
new manifestation of traditional conflict. 
Terrorism is the particular enemy of 
democratic government. 

Who, for example, is the target of 
the terror of Peru's Shining Path guer- 
rillas? Is it poverty or oppression? No. It 
is Peruvian democracy. Today the 
automatic weapons of Sendero Luminoso 
are trained on President Belaunde and 
his democratic government; tomorrow 
they will be aimed at his elected suc- 

Democracies have the moral authori- 
ty and obligation to prevent terrorists 
from stealing their freedom. We must 
have the courage to stand up to the ter- 
rorists and defeat them without falling 
prey to their methods. 

The United States will not be driven 
off a democratic course by terrorism, 
whether at home or abroad. We are in- 
creasing .significantly our capabilities to 
defeat terrorism and to work closely 
with others in doing so. Last month, the 

1 longress adopted several laws 
aimed at hijacking, hostage taking, and 
igainsl diplomatic missions. We 
have begun an antiterrorism training 
and assistance program for civilian 
agencies Of friendly governments, 
paralleling those with friendly military 
for' • 

But a greater multilateral effort is 
required. The OAS and its member 
states must act on this increasingly evi- 
dent fact: that a terrorist or guerrilla at- 
tack on any democracy is an attack on 
all democracies. 

Illicit narcotics production, traffick- 
ing, and abuse have much the same im- 
pact as terrorism— and there are cases 
of a lawless symbiosis between traf- 
fickers and terrorists. 

Once considered mainly a "U.S. 
problem," drug abuse is spreading, 
cancer-like, throughout the hemisphere. 
Drugs are attacking families, com- 
munities, and societies that previously 
felt themselves immune. And the costs 
of drug abuse are real: lost productivity, 
escalating health and social expenses, 
and, most profoundly, the senseless 
waste of life. 

The illicit narcotics industry breeds 
corruption and special influence, damag- 
ing the law and public institutions. The 
lure of extraordinary drug profits en- 
tices producers into an underground 
world that subverts legitimate 
businesses and threatens banking 
systems and national economies. And by 
increasing related criminal activities, 
drug trafficking weakens the entire 
social fabric. 

Growing awareness of this enormous 
threat has led to important multilateral 
policy statements in Quito and Buenos 
Aires and at the August meeting of the 
Inter-American Economic and Social 
Council in Santiago. Illicit drug traffick- 
ing is one of the agenda items for this 
General Assembly. It deserves our 
serious attention and immediate action: 
to inform our publics, to increase 
cooperation among national narcotics 
control agencies, and to strengthen ex- 
isting international institutions. 
Democracy requires a collective victory 
over the traffickers and their allies. 

The Need for a Strong Judiciary 

One way to fight the terrorists, the drug 
traffickers, and all who abuse human life 
and dignity, is to develop the capacity of 
our legal systems to render independent, 
fair, timely, and accessible justice. 

Last summer, I received a letter 
from some private citizens who com- 
mented that: "If one really wants to sup- 
port a process of consolidation of 
democracy . . . one simply cannot 
neglect . . . the third and most delicate 
of the powers of the state: the judicial 
power." I couldn't agree more. It is fun- 
damental that in a democratic society all 
citizens have access to means for effec- 
tive enforcement of their civil, political, 
economic, and social rights. 

All the members of the inter- 
American system recognize the equality 
of all citizens before the law. All provide 
for an independent judiciary. This is 
part of our common heritage. Regret- 
tably, what is proclaimed is not always 
what is done. In many nations, the legal 
system lacks the capacity to assure that 
the principles established by law are 
observed in fact. The problem varies 
from country to country, but each is af- 
fected, including my own. 

The problem of imperfect justice is 
not something we or any other nation 
can "solve." To be effective, the ad- 
ministration of justice must evolve con- 
stantly to stay in tune with social 
realities. We must give both immediate 
needs and long-range institution-building 
a prominent place among our concerns. 

Each nation must make its own deci- 
sions regarding its own judicial 
needs— and then sustain the commit- 
ment to see them through. A number of 
governments are doing so. And through 
regional cooperation, national decision- 
makers can consult on approaches to 
common problems; they can pool 
resources to achieve some aspects of 
reform more effectively. 

Last year's OAS General Assembly 
established an inter-American program 
for cooperation in legal development. If 
actively implemented, this program 
could be a useful mechanism for con- 
sultations and technical assistance. The 
U.S. Government has begun to 
cooperate with a number of govern- 
ments and private organizations to sup- 
port their efforts to improve the ad- 
ministration of justice. We are ready to 
do more. This is an integral component 
of our support for the consolidation of 
democratic institutions throughout the 

Restoring Growth 

Let me turn to the subject that we 
discussed yesterday, which I have 
headed here "restoring growth." And I 
would start by saying that I felt myself 
that our informal dialogue was a pleas- 
ure. The format worked well, the topics 
people picked out to discuss under the 
general economic heading were the right 
ones, the discussion was good— a lot of 
content to it— so I think we are in a 
position to turn our ideas into achieve- 

Until just a few years ago, economic 
growth in this hemisphere was steady, 
strong, and substantial. It is important 
that we remind ourselves of that, 


Department of State Bulletin 


because it shows what can be done. 
Throughout the 1960s and 1970s, it 
averaged about 6% per year. This 
represented real progress. But many 
trade, investment, and entrepreneurial 
rigidities remained. And although 
domestic savings were very important, 
foreign indebtedness grew very signifi- 

In the 1960s, capital inflow to Latin 
America was largely official assistance 
or foreign direct investment. In the 
1970s, foreign capital came mostly in the 
form of commercial loans. Some of this 
newly incurred debt supported invest- 
ment projects with rates of return high 
enough to justify the borrowing. Other 
debt went to build reserves. But con- 
siderable borrowings were spent for con- 
sumption, or some financed capital 
flight. When growth in the hemisphere 
came to a halt in 1981, old debt became 
harder to repay and new debt became 
more expensive. By 1982, the burden of 
servicing external debt became extreme- 
ly heavy, and some countries were 
forced to suspend payments and seek 

We are still adjusting to these 
shocks. But the initial crisis has been 
managed. In the past 2 years, over $70 
billion in external debt has been 
rescheduled. Through such cooperative 
efforts, and with the support of 
multilateral financial institutions, orderly 
servicing of debt has resumed in many 
countries. With private and government 
debtors and creditors all playing a part, 
the international financial system has 
proved more flexible and effective than 
many had believed possible. 

The major task now is to resume 
substantial, sustained growth. An effec- 
tive growth strategy typically requires 
structural adjustments to bring govern- 
ment spending more in line with govern- 
ment revenue, to increase domestic sav- 
ings, and to increase productivity. 

The allocation of scarce resources 
when demands on those resources are 
growing is politically challenging. Each 
country must make the tough decisions 
on how to stabilize and restructure its 

For our part, we encourage private 
lenders to continue to participate 
prudently in lending and rescheduling. 
We work with other creditor govern- 
ments to reschedule official government- 
to-government debt. At the same time, 
we work with multilateral lending in- 
stitutions to assist with immediate 
resource needs and to promote 
necessary economic reforms. And we 

are ourselves growing steadily and keep- 
ing our markets open so that our 
trading partners can grow with us. 

Latin American exports to the 
United States grew by almost $4 billion 
from 1982 to 1983, while they decreased 
to the rest of the world. In 1984, the 
United States will take an even greater 
share of Latin America's exports, almost 
$8 billion more than in 1983. The 
region's exports to the United States are 
up 18% for the first 8 months of the 
year, compared to the same period last 
year. We have supported this expansion 
through the Caribbean Basin Initiative, 
renewal of the generalized system of 
preferences, and our continuing strong 
commitment to open market policies. 

But the good news on rescheduling 
of the debt and the good news on trade 
are not enough. Restoring vigorous and 
sustainable growth to the hemisphere 
will require both appropriate domestic 
policies in the debtor countries and con- 
tinued infusions of capital. 

Realistically, levels of official 
assistance, whether from bilateral or 
multilateral sources, will not rise much 
in the years ahead. And it is clear that 
commercial lending at the levels that 
prevailed in the 1970s is not in the in- 
terest of the banks or the borrowers. 

The conclusion is inescapable: the 
capital required to sustain new growth 
will have to come from somewhere else. 
That means greater investment flows 
and voluntary conversion of debt capital 
to equity capital. Inducing greater 
domestic savings and the return of flight 
capital— there is a huge amount of 
capital that has fled and it can be at- 
tracted back— of the past decade will be 
fundamental. So also will be foreign 
direct investment. 

With respect to foreign investment, 
moreover, the inescapable conclusion 
happens also to be beneficial: in hard 
times, the costs of investment, serviced 
by profits, are lower than the costs of 
debt capital. Debt must be serviced in 
bad times as well as good; remittances 
from investments occur only if there are 
profits to remit. 

Investment, especially foreign direct 
investment, also provides more than 
financing: it develops human resources 
through training and education; it pro- 
vides access to technology and linkages 
to international export markets; it in- 
creases domestic marketing know-how; 
and it often generates domestic invest- 
ment in linked industries. 

Governments make the rules under 
which investors operate. Investors base 
their decisions on their calculations of 

likely risk and likely return. The 
challenge is to attract foreign direct in- 
vestment in the face of stiff competition 
for international economic resources. 

It will take political courage and 
determination to develop a competitive 
position. Internal adjustments— as well 
as international cooperation— are essen- 
tial. International efforts cannot 
substitute for sound domestic political 
and economic leadership. International 
cooperation can supplement effective 
local leadership; it cannot replace it. 

Let me take a moment to add a 
point about stereotypes. I have noted 
the dangers of the old intellectual pre- 
judices that political violence inevitably 
prevents democracy in Latin America 
and the Caribbean. I will be just as 
straightforward about outmoded views 
in the economic sphere. 

There is little argument that foreign 
investment provides varied benefits com- 
pared to the burdens of borrowing. But 
there is still a bias against private 
foreign investment. It exists throughout 
the hemisphere, including in the United 
States. Fear of "economic imperialism" 
is part of our intellectual baggage, and 
in recent years, it has often been 
equated with fear of the power of 
multinational corporations. 

Nations rightly defend their 
sovereignty and independence. The abili- 
ty to devise policies, laws, and regula- 
tions affecting foreign trade and invest- 
ment is an obvious attribute of 
sovereignty. Today, however, this is not 
the issue that it once was. Most multina- 
tional companies have learned to take in- 
to better account the social conse- 
quences of their actions and to adapt to 
host country circumstances and policies. 
Most governments, meanwhile, have 
learned how to develop rules and how to 
enforce them. 

If anything, today it is the private 
companies, the potential investors, who 
are concerned about the difficulties of 
operating in the face of restrictive rules 
enforced by government bureaucracies 
with little understanding of production 
or. marketing requirements. 

If we are to put into practice what 
we proclaim about growth and equity 
and a better standard of living, we all 
have a responsibility to modify or 
discard stereotypes that are no longer 
germane. Today, attracting both 
domestic and foreign investment can be 
a route to more freedom and in- 
dependence rather than less. It is an 
essential part of any strategy for restor- 
ing growth. 

January 1985 



OAS and the Future of 
the Western Hemisphere 

Finally, I would like to share a few ideas 
about the future of this hemisphere and 
of this organization. 

The OAS has the potential to be 
more than the sum of its parts because 
it can unite diverse elements in common 
action. It has an enviable record: of 
peacekeeping, of promoting human 
rights, and of technical and other 
cooperation for development. Today, 
with more than 90% of the people of 
this hemisphere living in democracies or 
in countries that are clearly in transition 
to democracy, we are closer than we 
have ever been to realization of a com- 
mon ideal— a hemisphere that is 
democratic 100%. 

In the expanding complexity of 
hemispheric relations and opportunities, 
the OAS cannot deal directly with 
everything. But this institution is our 
common ground, the setting for many of 
our discussions, and the repository of 
important common hopes. 

The unanimous election of Am- 
bassador Baena Soares as Secretary 
General augurs well for the future of the 
OAS. My colleagues and I are looking 
forward to continued close cooperation 
with him, and with delegates from all 
member states, to help make the OAS a 
more effective instrument for coopera- 
tion throughout the hemisphere. 

Soon after taking office, the 
Secretary General committed himself to 
"revitalize" the organization, to instill a 
new spirit, and to engage it more effec- 
tively in hemispheric affairs. The United 
States supports those aims. We are all 
aware that, like any other institution, 
the OAS must adjust to changing times. 

Changes in the hemisphere and in 
the organization's membership have 
made clear, for example, that we need a 
new definition of burdensharing for the 
organization's budget. Secretary General 
Baena Soares has had the courage and 
the initiative to declare publicly that the 
present system, adopted in 1949, 
demands revision. Previous general 
assemblies have underscored the need 
for the OAS to set up its own quota 
system. The United States will con- 
tribute in every way possible to a solu- 
tion. Toward this end, we will seek an 
increase in our voluntary contributions 
for OAS technical assistance programs. 

This organization, like any other, 
depends on the quality of the effort put 
into it. As sovereign nations, our effort 
will reflect the nature and quality of our 

Good government in try- 
ing til ol easy. It requires political 

rage and statemanship. It requires 
care and persistence. 

But people respond to leadership 
that is principled. They will support 
statesmen with the courage to prosecute 
drug traffickers and to oppose terrorists 
for what they are. And they will support 
governments that create real jobs by 
releasing the productive power of 
private initiative. 

Democracy offers the fairest and 
best means for choosing leaders with 
these qualities. This more-democratic- 
than-ever OAS has a better-than-ever 
chance to help us realize together the 
promises of this new world. Let us pro- 

NOV. 12, 1984 

First I'd like to thank the Government 
of Brazil for their warm welcome to me 
and my party and, in particular, I had 
the privilege of a private meeting with 
President Figueiredo and was able to ex- 
tend to him President Reagan's 
greetings and compliments on his efforts 
in leading Brazil into democracy. I also 
had the privilege of meeting with each 
of the presidential candidates and an in- 
teresting evening with leading 
Brazilians. As a person who's been here 
many times, I was very pleased to get 
the feel of Brazil now as more like it 
used to be, as a country who thinks the 
future belongs to it, and that was very 
welcome. So I was very pleased to have 
a chance to visit with my Brazilian 
friends on the occasion of the OAS 

Q. You met — you breakfasted this 
morning with ministers from four na- 
tions in Central America and then you 
met individually with Ministers from 
Mexico and Colombia. We understand 
that there are bilateral negotiations 
going on just now. What can you tell 
us about the prospects of peace in 
Central America, and specifically what 
role you have played in the events 

A. In addition to the meetings you 
mentioned, I've also had a chance to 
chat with the Foreign Minister of 
Venezuela, the Foreign Minister of 
Panama. I've had a chance to see quite a 
variety of people. These are meetings 
that I've held typically in New York, or 
Caracas, or Washington, or wherever 
we happened to be meeting, and we 
reviewed the situation. I think from our 
standpoint, and theirs as well, we reaf- 
firmed the importance of the Contadora 
process, the importance of trying to find 
a regional solution to the problems of 
peace and economic development, 

democracy, justice, here in the Central 
American region, and there are dif- 
ficulties, people are discussing them, and 
insofar as the United States is con- 
cerned, our effort is always to try to be 
a constructive part of the process. 

Q. Just to continue the question of 
my colleague — I would like to know 
why you met the four ministers of 
Central America and you didn't meet 
the delegate from Nicaragua, and also 
its delegate had said just about half 
an hour ago that still Nicaragua 
awaits for an invasion by the United 
States. I'd like to know what you have 
to say about those two questions? 

A. The fears of invasion seem to be 
self-induced on the part of Nicaragua, 
based on nothing, and I don't know why 
they are doing this. Obviously they are 
trying to whip up their own population 
but I can't imagine what the reason is 
for wanting to do that. So I can't shed 
any light on that. I might say that it is 
certainly a problem in the region that 
they continue to import heavy Soviet ar- 
mament as we saw last week, but as far 
as the invasion fears are concerned they 
seem to be a self-inflicted wound on the 
part of Nicaragua. I recall to you that 
Comandante [Daniel] Ortega went to the 
United Nations in New York and 
predicted an invasion, I think around Oc- 
tober 15 or something like that, so that's 
long in the past, so I don't know what 
further to say about that. As far as 
meetings are concerned, we have 
scheduled as many meetings as we 
could, the time is rather limited, and I 
did want to concentrate and have a 
chance to meet with my friends in Brazil 
as well as OAS ministers. However we 
have an active dialogue with Nicaragua. 
It was initiated some time ago when I 
went to Managua and which has been 
carried on through seven or eight 
meetings now I guess by Ambassador 
[Harry] Shlaudeman with further 
meetings scheduled, so there is a 
dialogue going on there. 

Q. The Yugoslav News Agency is 
repeating the report in the Times Fri- 
day that you may be going to Moscow 
in January. Can you tell us how firm 
that is, what the purpose of the trip 
would be, and what the prospects are 
for improving U.S. -Soviet relations? 

A. They must know something I 
don't know. 

Q. Today in your speech you refer- 
red to certain prejudices that people 
have about multinational corporations, 
especially in terms of their creating 
problems that make it difficult for 
debtor nations to develop, and I'd like 


Department of State Bulletin 


to ask whether in your meeting today 
with the President of the Republic [of 
Brazil]. President [Joao Baptista de 
Oliveira] Figueiredo, did you have an 
opportunity to bring up this matter 
with him? Did you diseuss this ques- 
tion and. in particular, did you discuss 
the question of the informatics in- 
dustry in Brazil? 

A. 1 didn't bring up and we didn't 
talk about the role of multinational cor- 
porations, but I do think it is a very con- 
structive role and tried to point out 
some of the developing aspects of it in 
my speech. There has been a great deal 
o( discussion of informatics during my 
discussions with the Brazilians and it's 
controversial here, although I guess in 
the vote it was rather lopsided, totally 
lopsided. But from my standpoint, as I 
would see it, I think that it's a mistake 
for a country to seal itself off from the 
exciting developments going on in infor- 
mation technology. 

Q. On the eve of the meeting of 
the Organization of American States 
in Saint Lucia, the United States 
spread the word around that 
Nicaragua was going to be receiving 
MiG-19s. Now we see that just prior 
to the holding of the Organization of 
American States meeting here in 
Brasilia, the United States started 
spreading the word that Nicaragua 
would be receiving MiG-21s. Don't 
you think that this is sort of an old 
type of propaganda, and don't you 
think that it is something that perhaps 
ought to be retired? 

A. What ought to be retired is the 
Soviet demonstrated large-scale effort to 
build up the level of armaments in this 
region, and there have been numerous 
statements made by the Nicaraguans 
about their desire for advanced aircraft, 
the MiG type, and from the standpoint 
of the United States we watch these 
matters very carefully. So I think what 
ought to be retired is this incessant 
buildup of armaments and armed forces 
in Nicaragua that are way outsized for 
any Central American purpose. 

Q. I would like to turn your atten- 
tion to the question of Chile. Over the 
past week the state of siege has been 
introduced, the press has been cen- 
sored, freedom of assembly has been 
curtailed. What is your reaction to 
what has happened and have you 
managed to communicate this reaction 
to General [Augusto] Pinochet [Presi- 
dent of the Republic of Chile]? 

A. 1 love Chile and its people, its 
vibrancy, and it is sad and disappointing 
to sec the developments that you refer 
to, and they are very disappointing to 
us, and I'm sure that General Pinochet is 
well aware of that fact. 

Q. About a week ago The 
Washington Post and some others in 
the print media printed a summary of 
what they said was a leaked Ad- 
ministration memo which suggested 
that the Administration was or- 
chestrating opposition to the Con- 
tadora draft agreement among the 
Core Four Central American coun- 
tries, and furthermore that the Ad- 
ministration was orchestrating world 
opinion to discredit the fairness of the 
Nicaraguan elections. Will you com- 
ment on the accuracy of those stories 
and of that memo? 

A. I don't comment on leaks other 
than to wish I would know who did the 
leaking so I could wring his or her neck 
and escort them out of the government. 
Now as far as the subject matter is con- 
cerned, the United States has worked 
quite hard" in support of the Contadora 
process for a long time, and we have ap- 
pointed a special Ambassador, initially 
Senator Richard Stone, and now Am- 
bassador Shlaudeman, to work on that 
full time, people of great talent. The ac- 
ta that was tabled, I think last June, we 
looked at and others looked at, and I 
think that the general consensus was 
that it didn't meet the problem, and in 
fact the Foreign Ministers of the Con- 
tadora countries themselves meeting in 
Madrid about 2 weeks or so ago issued a 
statement saying just that, and that fur- 
ther work was necessary. So it was not 
simply an opinion of the United States, 
it was a general opinion that a lot of 
progress had been made but further 
progress was necessary if we are going 
to get to the kind of document that we 
want. And the second part of your ques- 
tion was what? 

Q. It also suggested that the 
United States was orchestrating world 
opinion — 

A. On Nicaraguan elections. No, 
there was not any need for that at all. It 
was quite obvious to everybody that the, 
what it was called, an election, was not 
an election. It was more like a plebiscite, 
and I think that this is a very generally 
held view, and that is certainly my view, 
and I don't hesitate to say it. But you 
have a situation where the leading op- 
position candidate, Arturo Cruz, 
meeting in Rio with a member of the 
Sandinista Directorate, comes to an 

agreement on suitable election condi- 
tions, and they back off. And then when 
Mr. Cruz or another credible candidate 
holds a rally, the Nicaraguans having 
pledged themselves to freedom of 
assembly, an absolutely elemental thing 
for any kind of democratic operation, 
the rally is broken up by the government 
as the people come to it. I don't think 
you can say that you have anything ap- 
proaching a democratic election. And it 
doesn't take the United States to or- 
chestrate opinion on that. 

Q. I have a feeling that I got a 
very fair understanding about what 
you said about this alleged possible in- 
vasion of Nicaragua. According to you 
this is really an invention by Coman- 
dante Ortega, and in fact Comandante 
Ortega lied at the United Nations and 
this information about this alleged in- 
vasion is actually groundless. This is a 
very comforting and reassuring infor- 
mation that you bring us because we 
have been fearful that Nicaragua 
might be invaded much as Grenada 
was invaded. I would like to know 
whether I did indeed hear you right 
and that I understand you correctly 
and would you please elaborate a bit 
on this point — are you saying that 
Nicaragua will not be invaded? 

A. Comandante Ortega said that 
they would be invaded around October 
15 and they were not. I didn't say he 
lied, I just said he made a statement on 
the basis of what, I don't know. There is 
nothing in the planning or discussions of 
the U.S. Government that would lay any 
basis for that whatever. So he was 
wrong. The same as the case right now 
about all of these alleged plans that the 
Nicaraguans are talking about. 

As far as Grenada is concerned, let 
me remind you that you had blood run- 
ning all over the country. You had 
chaos. You had a lot of American 
students there, and you had the 
surrounding states as part of a treaty 
operation of their own pleading with the 
United States to help them right the 
wrongs in their region. And I think it is 
to the President's everlasting credit that 
we responded and responded quickly and 
decisively. And I'm sure that if he had to 
do it all over again he would. 

Q. [Through an interpreter] He 
feels that the Secretary did not re- 
spond to his question as to whether 
Nicaragua was going to be invaded or 
not. And I would like to know if the 
Secretary can give this guarantee or 
not? That was the thrust of his ques- 

A. I think I have answered it, so I'll 
take the next question. 

January 1985 



Q. If the United States is so upset 
about Soviet arms shipments to 
Nicaragua, what does it plan to do 
about it? And just as an afterthought 
question, what did you mean by 
"favorably surprised" by events in 

A. As far as the events in 
Guatemala are concerned there was an 
election that came off very successfully 
in the middle of the year, in July I 
believe, and there are plans for further 
movements in the direction of 
democracy. I have had the privilege of 
discussing them with General [Victores] 
Mejia [Guatemalan Chief of State] as 
well as Foreign Minister [Diaz-Duran] 
Andrade and I think those are very en- 

couraging developments and that's what 
I was referring to. And the first part of 
your question again? 

Q. If the United States is so 
distressed about Soviet arms ship- 
ments — 

A. What are we going to do about 
it? Well, in the first place we have to 
help our friends put themselves in the 
capacity to resist the aggression that 
comes from those arms, and we have 
been doing so, and I believe that we 
have been doing so in a program that 
has looked toward open and democratic 
society, the rule of law, economic 
development and a security shield 
against the aggression that has been 

launched from Nicaragua against its 
neighbors. And that program is increas- 
ingly successful, particularly as evi- 
denced in El Salvador with the election 
of President [Jose Napoleon] Duarte, the 
increasing strength of the Salvadoran 
military and now the dramatic moves 
toward peace by President Duarte. So 
what we are trying to do about it is 
discourage these shipments, to make it 
more and more difficult for them to be 
used against the neighbors of Nicaragua, 
and to work in every way that we can to 
cast this aggressive and subversive in- 
fluence out of our hemisphere. 

'Press release 251 of Nov. 13, 1984. 
2 Press release 250 of Nov. 14, 1984. 

Central America: Agriculture, 
Technology, and Unrest 

The following paper was prepared by 
Dennis T. Avery of the Bureau of In- 
telligence and Research in May 1984. 


The current unrest in Central America 1 
is not agrarian led, but it reflects rural 
pressures. Historically, Central 
America's small farmers (campesinos) 
have taken an active role in armed con- 
flict only when their standard of living 
has been threatened directly. Rural 
population growth and cotton expansion 
currently combine to threaten the 
campesino lifestyle. Guerrilla groups 
have intensified the problems of unrest 
by deliberately trying to catch the 
region's rural population in political and 
military crossfire. 

A key factor causing the unrest is 
the sharp increase in rural populations, 
which have more than doubled since 
1950. Crop yields on the region's small 
traditional farms have been stagnating, 
while the land has been farmed more in- 
tensively with less fallow. As the 
father's 3-hectare farm has been sub- 
divided among the three sons, 
campesinos have become increasingly 
concerned about how they will feed their 

The rural population explosion and 
declining per capita food production ex- 
plain the strong correlation between cot- 
ton production and political destabiliza- 
tion in the area. Cotton plantings ex- 
panded rapidly in the 1950-70 period in 
El Salvador, Guatemala, and Nicaragua. 


El Salvador 


Central American Population 











1 ,232 











Total population figures arc L980 UN estimates. Rural population figures arc derived 
i and Agriculture Organization (FAO) estimates of the proportion of each country's 
in rural an-;, 

At first cotton was welcomed to low- 
elevation tropic areas; new pesticides 
helped control both malaria and cotton 
pests. Over time, however, cotton 
displaced campesinos and their sub- 
sistence crops, and cotton employment 
was cut sharply by increased use of 
chemicals and machinery. Cotton was in- 
creasingly seen to enrich the upper 
classes while it disadvantaged the rural 
poor. (Previous export crops in the 
region had been more labor intensive.) 

Land reform is helping gain time for 
the political process. It is an important 
policy element in both El Salvador and 
Nicaragua. Land reform cannot solve 
the basic population/food production 
equation, however. Even the conversion 
to food production of all land now in ex- 
port crops would ease the food problem 
only temporarily. Moreover, the loss of 
sugar, cotton, and coffee export earn- 
ings would worsen the foreign exchange 

Ultimately, the Central American 
economic problem can be solved only 
through sharply increased yields of both 
food crops and export crops, along with 
development of the nonagricultural sec- 
tors. Without such progress, most of 
Central America will remain desperately 
poor — especially if population growth 
continues at a rapid rate. 


Central American unrest has been at- 
tributed to a number of causes. The 
rigid social structure with its division 
between Europeans and Indians has 


Department of State Bulletin 


engendered continuing broad resent- 
ments. Much of the region's modern 
history has been dominated by 
authoritarian regimes with relatively lit- 
tle concern for finer points of human 
rights. Nevertheless, such problems are 
widespread in the world and do not 
necessarily produce revolution. 
Communist-supported leftwing 
movements in Central America have 
fanned discontent but, without rapid 
population growth, might not have been 
able to generate a civil war. Population 
growth and the expansion of cotton 
plantings are the factors that have 
raised economic and social pressures to 
the flash point in the last decade. 

The population of Central America 
began to grow rapidly in the 1930s as 
clinics, vaccines, and hygiene lowered 
the death rate from such diseases as 
malaria, smallpox, and dysentery. Death 
rates have continued to decline, while 
birth rates have fallen much more slow- 
ly. Between 1950 and 1980, population 
grew by more than 150%, from 8.3 
million to 20.7 million. 2 

El Salvador's population has risen 
from about 2 million in 1950 to 4.8 
million in 1980 (see table on El 
Salvador's Population Growth). 3 The 
rural population has grown nearly as 
rapidly, from 1.2 million to 2.8 million. 
El Salvador's natural growth rate prob- 
ably peaked at some 3.3% in 1965, but 
the rate is still high — an estimated 
2.9% — and a very large proportion of 
the population is young and fertile. El 
Salvador's total fertility rate dropped 
significantly from a peak of 6.9 births 
per woman over her lifetime to about 
6.0 births per woman toward the end of 
the 1970s — but this was still nearly 
three times the "replacement" level that 
would mean population stability 
(estimated at 2.1 births per woman). 

Agricultural Development 

In pre-Columbian times, the Indians of 
Central America practiced shifting 
cultivation around their villages. As the 
fertility of a field declined, a new one 
was cleared and the old one left to 
recover. The Mayan culture flourished in 
the tropic lowlands. These areas were 
not dangerously unhealthy until the Con- 
quistadores brought malaria, forcing the 
Indian culture to concentrate in the 
higher elevations. The European col- 
onists developed a few large plantations 
to produce such export crops as indigo 
and cochineal (for dyes), and these plan- 
tations coexisted with the Indians' shift- 
ing cultivation. 

El Salvador's Population Growth 




Birth Rate 

Death Rate 


(lifetime births 

(per 1,000 



per woman) 


























Source: 1980 UN 


After 1850, coffee became a major 
export crop, working profound changes 
on the region's agriculture. Permanent 
tree plantings necessitated permanent 
title to and cohtrol of the land. The 
highland slopes and valleys between 500 
and 1,500 feet elevation were enclosed, 
and formal titles were issued. Few of 
the titles went to Indians. Coffee was a 
labor-intensive crop, however, and the 
coffee planters needed workers. Sugar 
and bananas, which also emerged as im- 
portant Central American exports in the 
19th century, were seasonally labor in- 

The planters and the campesinos 
reached an uneasy truce in which the 
workers needed on the plantations year 
round were given plots for subsistence 
crops on the outer reaches of the plan- 
tations. Campesinos who had small 
farms in the more rugged areas general- 
ly did seasonal wage work on the planta- 
tions. Neither big nor small farms 
achieved high productivity. The 
campesinos lacked knowledge and 
capital. The large landowners seldom 
managed their farms intensively; much 
of their valley land was left in pasture 
or fallow. 

Rising Pressure on 
the Land Base 

In recent decades, the rising population 
has put more and more pressure on the 
arable land (see table on Distribution of 
Cropland by Commodity). While the 
number of people was increasing 150% 
the supply of arable land expanded less 
than 50%. Some pastures were con- 
verted to crops, and there were some 
small government programs to colonize 
undeveloped areas. But the region's 

relatively primitive food-production sec- 
tor has been unable to support adequate- 
ly the huge population increases, in El 
Salvador, the per capita ratio of arable 
land not in export crops has dropped 
from .19 hectare to .08 hectare. 

A declining ratio of land to people is 
not unusual. In most parts of the globe, 
food availability can be sustained — or 
even improved — through increased 
yields and/or commercial imports. In 
Central America, food production has 
been largely left to the tiny farms of the 
traditional sector, where yields have 
been stagnant or declining. The farmers 
typically grow subsistence crops for 
their own families and possibly, on their 
best land, some wheat for sale. If good 
weather gives them a surplus of corn or 
beans, these products can be sold. The 
traditional farmers make little use of 
fertilizer, pesticides, or high-yielding 

To compound Central America's dif- 
ficulty, the region's off-farm economic 
performance has continued to be poor. 
The rates of gross national product 
growth looked healthy during the 1960s 
and 1970s, but much of that growth was 
still tied to agriculture — specifically to 
expansion of cotton and cattle exports 
and to relatively high prices for coffee 
and sugar. As recently as 1970, El 
Salvador reported only 25,000 factory 
jobs not tied to agriculture. Thus the 
region is in a poor position to make up 
for its land scarcity with increases in 
either food production or imports fi- 
nanced by nonfarm exports. 

Central America's population is ex- 
pected to continue growing for decades, 
so the land/person ratios will continue to 
worsen. Some countries, especially 
Guatemala and Nicaragua, still have 

January 1985 



Distribution of Cropland by Commodity 


Coffee Sugar 

(1,000 hectares) 


Food Food 
Cropland Cropland 
(residual) Per Capita 


Costa Rica 










El Salvador 



































Cropland Sources: FAO. 
Population: 1980 UN estimates. 

fairly large tracts of undeveloped land. 
This raw land is expensive to develop, 
however, because it lacks roads, schools, 
farm supply firms, and all other forms 
of infrastructure. Some efforts at col- 
onization have been made, but produc- 
tivity has been lower than expected and 
costs higher. Only when high profits for 
export crops (e.g., cotton and bananas) 
have lured substantial private invest- 
ment has Central America been able to 
develop additional land quickly. 

Only about 14% of the region's arable 
land is in export crops, so the problem 
cannot even be solved for any length of 
time by shifting land from the export 
sector to food crops. Moreover, 
eliminating export crops would cut off 
foreign exchange earnings, and it is im- 
ports of the fertilizers and pesticides 
which have helped to make the export 
sector more productive. 

The Cotton Invasion 

DDT and other modern pesticides freed 
Central America's tropic lowlands from 
malaria during the 1950s, and at the 

ae made it possible to grow cot- 
ton ii highly favorable to insect 
I '.<■ Pacific Coast lowlands of EI 
1 I i itemala, and Nicaragua 

with their deep, rich, volcanic soils 
proved ideal for cotton. Cotton varieties 
developed in the United States grew 
taller and yielded more heavily than they 
ever did in the United States. Cotton de- 
mand was relatively strong in that 
period, and Central American land 
values were low. Plantings expanded 
rapidly from fewer than 50,000 hectares 
in 1950 to 273,000 in 1960 and more 
than 400,000 in 1979. 

At first, the new crop seemed a 
great boon to the region (see table on 
Central American Cotton Plantings). 
Banana production had been cut back by 
disease, and coffee earnings had been 
disappointing. Cotton exports, negligible 
before 1950, reached $37 million in 1960 
and jumped to $420 million in 1979. In 
the early cotton years, the benefits 
seemed relatively widely shared. Most of 
the land was prepared by tractors and 
the cotton was machine planted, but 
thinning and weeding were done by 
hand, providing work for thousands of 
people. Picking, the biggest job of all, 
also was done by hand. The cotton in 
most of the region grew so tall that 
mechanical pickers had trouble getting 
through it. With hand picking, the cot- 
ton could be harvested several times, 
and both yields and fiber quality were 

As cotton production expanded, it 
drew more workers and their families 
from the less-favored areas. Often they 
cleared plots for their food crops near 
the cotton fields. Sometimes the land- 
owners encouraged this development, of- 
fering the workers temporary use of the 
land in return for clearing more. This 
system worked well — until cotton had 
occupied all of the available cropland in 
the area and displaced the campesinos' 

Technology began gradually to 
displace labor in the cotton fields. 
Earlier Central American export crops 
had all been labor intensive. But now 
herbicides, rather than campesinos with 
hoes or machetes, could keep down the 
weeds in the cotton fields. In Nicaragua, 
even the picking began to be mechanized 
on the larger farms; mechanical pickers 
ultimately harvested about 40% of that 
country's crops. The campesinos were 
losing both cropland and jobs to the cot- 
ton technology. 

There are no hard numbers on labor 
displacement in Central America's cot- 
ton fields. In the United States, 
however, cotton's labor requirements 
dropped from about 300 work-hours per 
bale in 1915 to fewer than 150 in the 
1950s and then to 30 in the latter 1960s. 
It seems reasonable to conclude that 
labor requirements in Central American 
cotton fields followed a similar trend, 
particularly where the fields were 
harvested by mechanical pickers. 

The cotton income distribution prob- 
lem was exacerbated because the big 
profits from cotton were going to the 
entrepreneurs and landowners. And 
because these classes found little of 
what they wanted to buy among Central 
America's manufactures, an abnormally 
large share of the cotton income was 
spent overseas. Little was invested to 
build a stronger economic base within 
Central America. 

The cotton revolution was only one 
of the major impacts on Central 
American agriculture during this period. 
Cattle production, for example, was in- 
creasing in response to strong world de- 
mand for meat and despite cotton ex- 
pansion in some of the traditional graz- 
ing areas. Some campesinos and their 
food crops were displaced by grazing 

No other factor in Central America, 
however, seems to correlate so strongly 
with destabilization of governments as 
the expansion of cotton. It is impossible 
to say just how many campesino work- 
hours were displaced by cotton. It is not 
even certain that the countries would 


Department of State Bulletin 


have been better Off without rotten. Cot- 
ton did add important!) to export earn- 
ings and government revenues in the 
region and did boost regional productivi- 
ty. Hut the combination of displacement 
and increased disparity o\' incomes— or 
possibly even the prospects of the 
diverging paths of the traditional and 
export sectors of agriculture— apparent- 
ly played a significant part in the 
susceptibility of Central American states 
to political destabilization. 

Rural Contribution to Violence 

Although Central America has a reputa- 
tion for frequent violent changes of 
government, the region's revolutions 
have seldom been led by agrarian 
elements. Small farmers seem to have 
taken an active role in armed conflict 
only when their standard of living has 
been threatened directly. The two most 
obvious historic periods of caynpesino 
violence have been: the enclosure period 
of the latter 19th century, when com- 
munal village lands were deeded to in- 
dividuals for coffee and sugar cultiva- 
tion; and the Depression of the 1930s, 
when incomes in the region were cut 
sharply and sizable numbers of landless 
poor from both the countryside and the 
cities "invaded" land on which to grow 
subsistence crops. 

Certainly the declining land/person 
ratio has put campesinos under severe 
economic stress, and the current unrest 
does involve rural elements. Even so, it 
is far from clear that the guerrillas have 
gotten strong, widespread support from 
small farmers. In fact, members of the 
early guerrilla groups in Guatemala have 
admitted to pursuing a "foco" strategy 
for involving the rural residents in the 
armed struggle: They established bases 
in specific rural areas and launched at- 
tacks on local garrisons and economic 
targets. The guerrillas say these actions 
were to "educate the local populace to 
the opportunities for armed struggle." 
The military often retaliated against the 
local villages, however, because the 
guerrillas were far more difficult and 
dangerous to find, catching the 
campesinos both literally and figurative- 
ly in a crossfire and turning many of 
them against the government. 

Policy Implications 

Central America's real problem is how 
to employ and feed its burgeoning 
population. Land reform can buy some 
time and perhaps expand the base of 

Central American Cotton Plantings 



-52 Avg. 


-65 Avg. 



Costa Rica 




El Salvador 




















Source: FAO. 

economic participation. It also may help 
achieve better income distribution, and 
this may lower tensions in the short run. 
In the longer term, however, income 
depends on productivity. Neither 
campesinos nor landowners have 
achieved outstanding productivity — nor 
have Central America's off-farm in- 

Central America's coups and revolu- 
tions have brought a wide variety of 
governments into power at various 
times. Some of them have been fully 
committed to such programs as 
widespread education, better health 
care, and capital investment in roads, 
railroads, and other infrastructure for 
economic development. Several ad- 
ministrations had "broken the power of 
the landowners" as early as 1871. Some 
of these efforts have continued over ex- 
tended periods. 

None of these efforts, however, has 
been able to overcome Central America's 
economic disadvantages: small labor and 
product markets scattered through rug- 
ged and relatively hostile geography, 
much of it in a tropical climate, in an en- 
vironment of unrest and expropriation. 
Regional development has been closely 
tied to agricultural resources, even in 
modern times. There seems little hope 
that Central American agriculture can 
even continue to employ as many people 
as it has recently, however, let alone 
provide productive roles for the in- 
evitable population increments that lie 

Central America already is strug- 
gling with the need to increase food pro- 
duction; the lowest cost means will be 
improved technology. This moderniza- 
tion process usually has meant the 

emergence of a new class of farmers 
who are better educated and better 
equipped than traditional farmers. (Even 
fertilizer and higher yielding seeds 
displace workers when the productivity 
of farm labor is very low.) Central 
America seems destined to be caught in 
the productivity/employment dilemma 
that has troubled every emerging 
economy from the England of the Corn 
Laws to modern Mexico. 

Because of continuing population 
growth, land reform by itself cannot be 
a permament solution to El Salvador's 
rural problems. Farming cannot provide 
sufficient employment for even the ex- 
isting rural labor force. Many of the 
land reform beneficiaries in El Salvador 
will still be very poor even by Salva- 
doran standards. Most of them will have 
to supplement their incomes with part- 
time work, and the labor surplus almost 
guarantees that their wage work will be 
poorly paid. Only when Central America 
manages to absorb significant amounts 
of its labor surplus in off-farm jobs will 
it begin to resolve the problems 
resulting from new farm and health 

'For purposes of this paper, Central 
America comprises Costa Rica, El Salvador, 
Guatemala, Honduras, and Nicaragua. 

2 UN estimates (see table on Central 
American Population). 

3 Political developments in El Salvador 
since 1980 have created substantial flows of 
refugees to other Central American countries 
and the United States. In the last 3 years, 
emigration (some of it presumably temporary) 
appears to have largely wiped out El 
Salvador's natural increase (i.e., the balance 
between births and deaths), currently 
estimated at about 2.9% annually. No long- 
term extrapolations should be based on this 
abnormal demographic situation. ■ 

January 1985 




November 1984 

The following are some of the signifi- 
cant official U.S. foreign policy actions and 
statements during the month that are not 
reported elsewhere in this periodical. 

November 1-11 

Deputy Secretary Dam visits Peru, Bolivia, 
and Argentina to meet with government of- 
ficials to discuss economic, political, and 
social issues. Dam attends a meeting of the 
Atlantic Conference in Argentina Nov. 8-10. 

November 1 

President Reagan approves $45.1 million in 
emergency food assistance to the drought vic- 
tims in Kenya, Mozambique, and Mali. 

November 3 

U.S. and Barbados sign a tax information ex- 
change agreement allowing U.S. business 
representatives to deduct tax expenses in- 
curred while attending business conventions, 
seminars, or meetings on the island. 

November 16 

President Reagan meets with Foreign 
Minister Yaqub Khan of Pakistan. 

November 17 

A U.S. Foreign Service national employee in 
San Salvador is murdered while walking 
along a street near the Embassy. 

November 18-20 

French Foreign Minister Cheysson makes an 
official working visit to Washington, D.C. He 
meets with Secretary Shultz on Nov. 19. 

November 13-21 

Malaysian Deputy Prime Minister Dato Musa 
Hitam makes a working visit to the U.S. 
While in Washington, D.C, he meets with 
Secretary Shultz on Nov. 20. 

November 19-20 

Ambassador Shlaudeman and Nicaraguan 
Vice Minister of Foreign Affairs Tinoco meet 
in Manzanillo, Mexico, for their eighth round 
of talks in support of the Contadora process. 

November 19 

U.S. pledges $67 million to the United Na- 
tions Relief and Works Agency for 1985. 

November 22 

U.S. and Soviet Union agree to negotiations 
for reaching "mutually acceptable agreements 
on the whole range of questions concerning 
nuclear and outer space arms." Secretary 
Shultz anil Soviet Foreign Minister Gromyko 
will meet on January 7-8, 1985, in Geneva. 

November 24 

Italian authorities arrest seven Lebanese 
suspected of planning to bomb the U.S. Em- 
bassy in Rome. The suspects are believed to 
be members of the Islamic Jihad organiza- 
tion, the group responsible for bomb attacks 
against U.S. installations in Lebanon. One of 
the suspects carried a map of the U.S. Em- 

November 26 

The following newly appointed ambassadors 
present their credentials to President 
Reagan: Tommy T. B. Koh (Singapore), 
Carlos Tunnermann Bernheim (Nicaragua), 
U Maung Maung Gyi (Burma), Kjell Eliassen 
(Norway), Mohamed Sahnoun (Algeria), and 
Mario Ribadeneira (Ecuador). 

State Department acting spokesman 
Romberg confirms that the number of U.S. 
personnel and dependents at the U.S. Em- 
bassy in Bogota, Colombia, is being tem- 
porarily reduced as a security measure. 

A car explodes on the street behind the 
U.S. Embassy in Bogota. One passer-by is 
killed and eight persons are injured. The Em- 
bassy building and cars parked on the com- 
pound receive minor damage. 

November 28-29 

Secretary Shultz meets with a Honduran 
delegation led by Minister of the Presidency 
Arriaga to discuss economic and security 

November 28-30 

U.S. and Soviet Union hold talks in Moscow 
on nonproliferation of nuclear weapons and 
technology to other nations. Ambassador 
Kennedy heads the U.S. delegation. 

November 28-December 5 

U.S. and Cuban officials hold the third round 
of talks to discuss the return to Cuba of 
Mariel excludables and related migration 
issues in New York. Deputy Legal Adviser 
Kozak heads the U.S. delegation. 

November 29 

Secretary Shultz signs a public notice to ex- 
tend the existing restrictions on the use of 
U.S. passports for travel to, in, or through 
Libya for an additional year. 

Shots are fired at the U.S. Embassy in 
San Salvador. No damage or injuries are 

November 30 

President Reagan meets with West German 
Chancellor Kohl at the White House. 

U.S. and France sign an agreement to 
establish a new artist exchange program. ■ 

Current Actions 



Convention on international civil aviation. 
Done at Chicago Dec. 7, 1944. Entered into 
force Apr. 4, 1947. TIAS 1591. 

Protocol on the authentic trilingual text of 
the convention on international civil aviation 
(TIAS 1591), with annex. Done at Buenos 
Aires, Sept. 24, 1968. Entered into force 
Oct. 24, 1968. TIAS 6605. 
Adherences deposited: Tonga, Nov. 2, 1984. 

Convention for the suppression of unlawful 
acts against the safety of civil aviation. Done 
at Montreal Sept. 23, 1971. Entered into 
force Jan. 26, 1973. TIAS 7570. 
Ratification deposited: Venezuela, Nov. 21 

1983. 1 

Memorandum of understanding concerning 
scheduled transatlantic passenger air fares, 
with annexes, statement, and protocol on in- 
terpretation. Done at Paris Oct. 11, 1984. 
Entered into force Nov. 1, 1984. 
Signatures: Belgium, Denmark, Finland, 

France, Federal Republic of Germany, 
Greece, Ireland, Italy, Netherlands, Norway, 
Portugal, Spain, Sweden, Switzerland, U.K., 
U.S., Yugoslavia, Oct. 11, 1984. 

Environmental Modification 

Convention on the prohibition of military or 
any other hostile use of environmental 
modification techniques, with annex. Done at 
Geneva May 18, 1977. Entered into force 
Oct. 5, 1978; for the U.S. Jan. 17, 1980. 
TIAS 9614. 

Accession deposited: Democratic People's Re- 
public of Korea, Nov. 8, 1984. 

Marine Pollution 

Convention for the protection and develop- 
ment of the marine environment of the wider 
Caribbean region, with annex. Done at Car- 
tagena Mar. 24, 1983. 2 
Ratification deposited: U.S., Oct. 31, 1984. 

Protocol concerning cooperation in combat- 
ting oil spills in the wider Caribbean region, 
with annex. Done at Cartagena Mar. 24, 
1983. 2 
Acceptance deposited: U.S., Oct. 31, 1984. 


Protocol to the convention on long-range 
transboundary air pollution of Nov. 13, 1979 
(TIAS 10541) on long-term financing of the 
cooperative program for monitoring and 
evaluation of the long-range transmission of 
air pollutants in Europe (EMEP). Done at 
Geneva Sept. 28, 1984. Enters into force on 
the 90th day after date of deposit of in- 
struments of ratification, acceptance, ap- 
proval or accession by at least 19 signatories 
meeting certain qualifications. 
Acceptance deposited: U.S., Oct. 29, 1984. 


Department of State Bulletin 


\\ omen 

Convention on the elimination of all forms of 
discrimination against women. Adopted at 
Wu York Dee. is. 1979. Entered into force 
Sept. .'.. 1981 

-sums deposited: Bangladesh, Nov. 6, 

1984; Equatorial Guinea, Oct. 28, 1984. 

Ratification deposited: Jamaica, Oct. lit. 



Agreement relating to employment of de- 
pendents of official government employees, 
with related note. Effected by exchange o( 
notes at Canberra Nov. ."> and 9. 1984. 
Entered into force Nov. 9. 1984. 


Agreement n investment insurance and 
guarantees. Effected by exchange of notes at 
Nassau Apr. .">. 1983. and Sept. 27, 1984. 
Entered into force Sept. 27, 1984. 


Agreement for the exchange of information 
with respect to taxes. Signed at Washington 
Nov. 3. 1984. Entered into force Nov. 3, 


Agreement concerning establishment of a 
radio relay station of the U.S Information 
Agency (YOA) in Belize, with annexes. 
Signed' at Belize Sept. 20, 1984. Entered into 
Sept. 20, 1984. 


Agreement concerning the provision of train- 
ing related to defense articles under the U.S. 
International Military Education and Train- 
ing (MET) Program. Effected by exchange 
of notes at Cotonou May 15 and Oct. 15, 
Entered into force Oct. 15, 1984. 


Agreement for the establishment and opera- 
tion of an OMEGA navigation system signal 
monitor. Signed at Washington and Santiago 
Aug. 23 and Sept. 5. 1984. Entered into 
force Sept. 5, 1984. 


Agreement concerning the provision of train- 
ing related to defense articles under the U.S. 
International Military Education and Train- 
ing (IMET) Program. Effected by exchange 
of notes at Djibouti Oct. 9, 1983, and June 3, 
; Entered into force June 3. 1984. 

Federal Republic of Germany 

Agreement on cooperative measures for 
enhancing air defense for central Europe, 
with understanding. Signed at Brussels 
Dec. 6, 1983. Enters into force upon notifica- 
tion by both parties that their respective 
domestic requirements have been complied 


Agreement extending the cooperative agree- 
ment of Oct. 22. 1981, (TIAS 10288) to assist 

the Government of Guatemala in execution of 
an eradication program of the Mediterranean 
fruit flv (MEDFLY). Signed at Guatemala 
Oct. 9, 1984. Entered into force Oct. 9, 1984; 

effective Oct. 1. 1984. 


Agreement providing a grant for the 
economic and political stability of Israel. 
Signed at Washington Oct. 31, 1984. Entered 
into force Oct. 31. 1984. 


Treaty on extradition. Signed at Washington 

July 13, 1983. 

Ratifications exchanged: Nov. 15, 1984. 

Entered into force: Dec. 15, 1984. 


Agreement for economic, technical, and 
related assistance. Signed at Maseru Oct. 17, 
1984. Entered into force Oct. 17, 1984. 


Agreement regarding the consolidation and 
rescheduling of certain debts owed to, 
guaranteed by, or insured by the U.S. Gov- 
ernment, with annexes. Signed at 
Washington Sept. 28, 1984. Entered into 
force Nov. 19, 1984. 


Agreement relating to trade in wool 
sweaters, with annex. Effected by exchange 
of notes at Colombo and Male Sept. 7 and 19, 
1984. Entered into force Sept. 19, 1984; ef- 
fective Sept. 29, 1982. 


Agreement amending agreement of Feb. 26, 
1979, as amended, (TIAS 9419) relating to 
trade in cotton, wool, and manmade fiber tex- 
tiles and textile products. Effected by ex- 
change of letters Oct. 30 and Nov. 6, 1984; 
entered into force Nov. 6, 1984. 

Memorandum of understanding relating to 
public awareness of dangers of drugs on 
public health. Signed at Mexico Sept. 25, 
1984. Entered into force Sept. 25, 1984. 

Agreement extending the cooperative agree- 
ment of Oct. 22, 1981, (TIAS 10373) relating 
to provision of services to assist in eradica- 
tion of the Mediterranean fruit fly (MED- 
FLY). Signed at Mexico Sept. 28, 1984. 
Entered into force Sept. 28, 1984; effective 
Oct. 1, 1984. 


Memorandum of understanding concerning 
interconnection of NICS TARE network and 
US AUTODIN. Signed at Brussels Sept. 14 
and 28, 1984. Entered into force Sept. 28, 


Agreement regarding the consolidation and 
rescheduling of certain debts owed to, 
guaranteed by, or insured by the U.S. 

Government and its agencies, with annexes. 
Signed at Dakar Aug. 22, 1984. Entered into 
force Sept. 24, 1984. 

South Africa 

Agreement amending arrangement of 
Oct. 29, 1954, and Feb. 22, 1955, relating to 
certificates of airworthiness for imported air- 
craft (TIAS 3200). Effected by exchange of 
notes at Pretoria June 7 and Oct. 8, 1984. 
Entered into force Oct. 8, 1984. 


Agreement relating to jurisdiction over 
vessels utilizing the Louisiana Offshore Oil 
Port. Effected by exchange of notes at 
Madrid Nov. 5 and 22. 1983. 
Entered into forc e: Oct. 19, 1984. 

Memorandum of understanding concerning 
mutual logistic support between the U.S. 
European Command and the Spanish Armed 
Forces. Signed at Madrid Nov. 5, 1984. 
Entered into force Nov. 5, 1984. 

Sri Lanka 

Agreement relating to the agreement of 
Mar. 25, 1975, (TIAS 8107) for the sale of 
agricultural commodities. Signed at Colombo 
Sept. 28, 1984. Entered into force Sept. 28, 


Convention for the avoidance of double taxa- 
tion and the prevention of fiscal evasion with 
respect to taxes on estates, inheritances, and 
gifts. Signed at Stockholm June 13, 1983. 
Proclaimed by the President: Nov. 14, 1984. 

United Kingdom 

Agreement amending the agreement of 

July 3, 1958, as amended (TIAS 4078, 4627, 

6659, 6861, 8014, 9688), for cooperation on 

the uses of atomic energy for mutual defense 

purposes. Signed at Washington June 5, 


Entered into force: Nov. 16, 1984. 

Memorandum of understanding concerning 
the provision of mutual logistic support, sup- 
plies, and services, with annexes. Signed at 
Vaihingen (F.R.G.) and London Oct. 5 and 
11, 1984. Entered into force Oct. 11, 1984. 

Memorandum of understanding amending an- 
nex 2 of the air services agreement of 
July 23, 1977, as amended (TIAS 8641, 8965, 
9722, 10059) with related letter. Signed at 
London Nov. 2, 1984. Entered into force 
Nov. 9, 1984; effective Nov. 1. 1984. 


International express mail agreement. Signed 
at Washington and Caracas Aug. 10 and 15, 
1984. Entered into force Dec. 1, 1984. 

'With reservations. 

2 Not in force. 

3 Not in force for the United States. ■ 

January 1985 




Department of State 

Press releases may be obtained from the Of- 
fice of Press Relations, Department of State, 
Washington, D.C. 20520. 

No. Date Subject 

243 11/1 Shultz: address before UN 
Association of the U.S.A., 
New York. 

*243A 11/5 Shultz: question-and-answer 
session following address 
before UN Association, 
Nov. 1. 

*244 11/2 Shultz: question-and-answer 
session upon departure, 
Cairo, Egypt, [The Secre- 
tary was en route to 
funeral of Indian Prime 
Minister Gandhi.] 
245 11/2 Shultz: arrival statement, 
New Delhi, India. 

*246 11/5 Shultz: statement, New 

Delhi, Nov. 3. 
247 11/5 Shultz: news conference, 
New Delhi, Nov. 3. 

*248 11/7 Program for state visit of 
Grand Duke Jean of Lux- 
embourg, Nov. 12-19. 

*249 11/8 U.S. telecommunications del- 
egations visit Japan, 
Nov. 26-30. 

250 11/14 Shultz: news conference, 

Brasilia, Brazil, Nov. 12. 

251 11/13 Shultz: remarks at the sec- 

ond plenary session of the 
OAS General Assembly, 
Brasilia, Nov. 12. 

*252 11/19 Shultz: interview on NBC 

"Evening News," Nov. 16. 

*253 11/21 Program for the official 

working visit of Fiji Prime 
Minister Mara, Nov. 25-29. 

*254 11/28 Program for the official 

working visit of West Ger- 
man Chancellor Kohl, Nov. 

*255 11/29 Program for state visit of 
Venezuelan President 
Lusinchi, Dec. 3-8. 

*Not printed in the BULLETIN. ■ 

Department of State 

Free single copies of the following Depart- 
ment of State publications are available from 
the Correspondence Management Division, 
Bureau of Public Affairs, Department of 
State, Washington, D.C. 20520. 

Free multiple copies may be obtained by 
writing to the Office of Opinion Analysis and 
Plans, Bureau of Public Affairs, Department 
of State, Washington, D.C. 20520. 

Secretary Shultz 

The Resurgence of Democracy in Latin 
America, General Assembly of the 
Organization of American States, Brasilia, 
Brazil, Nov. 12, 1984 (Current Policy #633). 

Preventing the Proliferation of Nuclear 
Weapons, UN Association of the U.S.A., 
New York, Nov. 1, 1984 (Current Policy 

Arms Control 

Conference on Disarmament (GIST, Nov. 

U.S. and NATO Nuclear Weapons Stockpile 

Reductions (GIST, Nov. 1984). 


The United States in the World Economy: 
Myths and Realities, Robert J. Morris, 
Deputy to the Under Secretary for 
Economic Affairs, Long Beach Interna- 
tional Business Association, Long Beach, 
California, Nov. 16, 1984 (Current Policy 

Multilateral Development Banks (GIST, 
Nov. 1984). 


The Democratic Ideal and U.S. National 
Security, Ambassador Bosworth, Rotary 
Club of Makati West, Manila, Oct. 25, 1984 
(Current Policy #630). 


The Challenge of Refugee Protection, Direc- 
tor of Refugee Programs Purcell, Ex- 
ecutive Committee of the UN High Com- 
missioner for Refugees, Geneva, Oct. 9, 
1984 (Current Policy #627). 

Science & Technology 

The U.S. and the Caribbean: Partners in 
Communication, Ambassador Dougan, 
Caribbean Seminar on Space WARC and 
the Transborder Use of IJ.S. Domestic 
Satellites, Montego Bay, Jamaica, Oct. 2, 
1984 (Current Policy #626). 

United Nations 

Afghanistan: Five Years of Tragedy, Ambas- 
sador Kirkpatrick, UN General Assembly, 
Nov. 15, 1984 (Current Policy #636). 

Perspectives on the U.S. Withdrawal From 
UNESCO, Assistant Secretary Newell, 
Stanford University, Palo Alto, California, 
Oct. 31, 1984 (Current Policy #634). 

Freedom of the Press: The Need for Vigi- 
lance, Assistant Secretary Newell, Inter- 
American Press Association General 
Assembly, Los Angeles, Oct. 30, 1984 (Cur- 
rent Policy #632). ■ 

Background Notes 

This series provides brief, factual summaries 
of the people, history, government, economy, 
and foreign relations of about 170 countries 
(excluding the United States) and of selected 
international organizations. Recent revisions 

Belize (Sept. 1984) 

Honduras (Sept. 1984) 

Luxembourg (Oct. 1984) 

Madagascar (Sept. 1984) 

Nepal (Aug. 1984) 

Nigeria (Sept. 1984) 

Paraguay (Sept. 1984) 

Togo (July 1984) 

Trinidad and Tobago (Sept. 1984) 

A free single copy of one of the above 
(and an index of the entire series) may be ob- 
tained from the Correspondence Management 
Division, Bureau of Public Affairs, Depart- 
ment of State, Washington, D.C. 20520. 

For about 60 Background Notes a year, a 
subscription is available from the Superin- 
tendent of Documents, U.S. Government 
Printing Office, Washington, D.C. 20402, for 
$32.00 (domestic) and $40.00 (foreign). Check 
or money order, made payable to the 
Superintendent of Documents, must accom- 
pany order. ■ 


Department of State Bulletin 

Foreign Relations Volume Released 

The Department of State on December 
6, 1984, released Foreign Relations of 

ates, 1952-1954, Volume II, 
National Security Affairs. The volume 
presents almost 2,000 pages of previous- 
ly highly classified and unpublished 
documents on national security strategy 
and programs, atomic energy, regulation 
of armaments, and international infor- 
mation policy. 

The early 1950s were the deepest 
part of the Cold War. American 
Presidents and policymakers struggled 
to develop national policies that would 
enhance security while reducing the 
risks of war. The defense buildup ini- 
tiated by NSC 68 and the outbreak of 
the Korean War in 1950 was continued. 
The Truman Administration by 1952. 
shifted emphasis away from short-term 
danger to overcoming the threat to the 
national security for the long haul. The 
Eisenhower Administration sought a 
preparedness program that would pro- 
vide security without ruining the 
domestic economy. The Eisenhower Ad- 
ministration undertook a detailed reex- 
amination of strategic options resulting 
in the decision by the end of 1953 to 
continue a containment policy, but to re- 
ly on a lean defense posture favoring 
strategic weapons. 

The volume also records the continu- 
ing efforts of the United States to find 
international control machinery for 
atomic energy and to reach agreements 
with the Soviet Union to reduce the 
growing stockpiles of atomic weapons. 

The volume also contains material on 
diplomatic aspects of the first U.S. 
hydrogen bomb test in 1952, efforts to 
obtain raw materials, peaceful domestic 
atomic energy development, considera- 
tion of test ban proposals, and coopera- 
tion in the field of arms control with the 
United Kingdom and other allies. 

In addition, this volume also docu- 
ments the U.S. campaign to take the of- 
fensive in information aspects of the 
Cold War from the establishment of the 
International Information Admin- 
istration in the Department of State to 
the creation of an independent United 
States Information Agency in 1953. 

Foreign Relations, 1952-1954, 
Volume II, National Security Affairs, 
was prepared in the Office of the 
Historian, Bureau of Public Affairs, 
Department of State. Copies of Volume 
II (Department of State Publication 
Nos. 9391 and 9392; GPO Stock No. 
044-000-02025-4) may be purchased for 
$28.00 (domestic postpaid) from the 
Superintendent of Documents, U.S. 
Government Printing Office, Washing- 
ton, D.C. 20402. Checks or money 
orders should be made payable to the 
Superintendent of Documents. The 
Foreign Relations series has been 
published continuously since 1861 as the 
official record of U.S. foreign policy. 
The volume released December 6, which 
is published in two parts, is the tenth of 
16 covering the years 1952-1954. 



Press release 256 of Dec. 4, 1984. 

January 1985 


Atlas of United States 
Foreign Relations 

The Atlas of United States Foreign Relations, 
prepared in the Bureau of Public Affairs, U.S. 
Department of State, provides basic informa- 
tion about U.S. foreign relations for easy 
reference and as an educational tool. Com- 
prising 100 pages with more than 90 maps 
and charts, it is divided into six sections 
dealing with: 

• U.S. national security; 

• Trade and investment; 

• International organizations; 

• Elements of the world economy; 

• Development assistance; and 

• Foreign relations machinery. 

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January 1985 
Volume 85, No. 2094 


Afghanistan: Five Years of Tragedy 
(Kirkpatrick, text of resolution) 45 

Afghanistan Under the Soviets: Five Years 
(Karp) 42 


Africa's Economic Crisis (Kirkpatrick) ... .48 

Food Assistance to Africa (White House state 
ment) 8 

Food Assistance to Ethiopia (White House 
statement) 7 

Agriculture. Central America: Agriculture, 
Technology and Unrest (Avery) 70 

Communications. The U.S. and the Carib- 
bean: Partners in Communication 
(Dougan) 32 


An Update of Constructive Engagement in 
South Africa (Crocker) 5 

Continuation of Iran Emergency (Reagan, 
letter to the Congress) 29 

Costa Rica. Contadora: A Process for Central 
American Peace (Sorzano) 59 

Cultural Affairs. U.S. -Japan Relations: Pres- 
ent and Future (Manstield) 10 

East Asia 

International Campaign Against Drug Traf- 
ficking (Thomas) 50 

1 S Japan Relations: Present and Future 
(Mansfield) 10 


Afghanistan Under the Soviets: Five Years 
(Karp) 42 

Africa's Economic Crisis (Kirkpatrick) .... 48 

Central America: Agriculture, Technology and 
Cnrest (Avery) 70 

Democracy and tne Path to Economic Growth 
(Shultz) 1 

Multilateral Development Banks 16 

The Resurgence of Democracy in Latin 

America (Shultz) 65 

S lapan Relations: Present and Future 
(Mansfield) 10 

The I'.S. in the World Economy: Myths and 
Realities (Morris) 13 

El Salvador. Contadora: A Process for Central 
American Peace (Sorzano) 59 

Ethiopia. Food Assistance to Ethiopia (White 
House statement) 7 


International Campaign Against Drug Traf- 
ficking (Thomas) 50 

Reflections on East-West Relations (Burns) 20 

»f the Grand Duke of Luxembourg (Grand 

Duke Jean, Reagan) 17 

Visit of West German Chancellor Kohl 
(Kohl, Reagan) 23 

Fiji. Visit of Fiji Prime Minister Mara (Mara, 
Reagan) 30 


Africa's Economic Crisis (Kirkpatrick) .... 48 

Food Assistance to Africa (White House state- 
ment) 8 

Food Assistance to Ethiopia (White House 
statement) 7 

Foreign Assistance 

Africa s Economic Crisis (Kirkpatrick) ... .48 

Food Assistance to Africa (White House state- 
ment) 8 

Food Assistance to Ethiopia (White House 
statement) 7 

Multilateral Development Banks 16 


Reflections on East- West Relations (Burns) 20 

of West German Chancellor Kohl (Kohl, 

Reagan) 23 

Guatemala Contadora: A Process for Central 

American Peace (Sorzano) 59 

Honduras. Contadora: A Process for Central 
American Peace (Sorzano) 59 

Human Rights 

Afghanistan: Five Years of Tragedy 
(Kirkpatrick, text of resolution) 45 

Situation in Kampuchea (Kirkpatrick) 57 

An Cpdate of ( onstructive Engagement in 
South Africa (Crocker) 5 

India. Assassination of India's Prime Min- 
ister Gandhi (Reagan, Shultz) 40 

Information Policy 

Freedom of the Press: The Need for Vigilance 
(Newell) 62 

The U.S. and the Caribbean: Partners in 
Communication (Dougan) H2 

International Law. IC.l Hears U.S. Argu- 
ment Against Nicaraguan Claim 
(Robinson) 24 

Iran. Continuation of Iran Emergency 
(letter to the Congress) 29 

Iraq. Visit of Iraqi Deputy Prime Minister 
(Aziz, Reagan) 29 

Japan. I'.S. -Japan Relations: Present and 
Future (Mansfield) 10 

Kampuchea. Situation in Kampuchea 
(Kirkpatrick) 57 

Luxembourg. Visit of the Grand Duke of Lux- 
embourg (Grand Duke Jean, Reagan) .17 

Middle East 

Continuation of Iran Emergency (letter 
to the Congress) 29 

Visit of Iraqi Deputy Prime Minister (Aziz, 
Reagan) 29 

Monetary Affairs. Multilateral Development 
Banks 16 


International Campaign Against Drug Traf- 
ficking (Thomas) 50 

The Resurgence of Democracy in Latin Amer- 
ica (Shultz) 65 


Contadora: A Process for Central American 
Peace (Sorzano) 59 

ICJ Hears U.S. Argument Against Nicaraguan 
Claim (Robinson) 24 

Pacific. Visit of Fiji Prime Minister Mara 
(Mara, Reagan) 30 


Afghanistan: Five Years of Tragedy (Kirk- 
patrick, text of resolution) 45 

Afghanistan Under the Soviets: Five Years 
(Karp) 42 

Population. Central America: Agriculture, 
Technology and Unrest (Avery) 70 

Presidential Documents 

Assassination of India's Prime Minister 
Gandhi (Reagan, Shultz) 40 

Continuation of Iran Emergency (letter 
to the Congress) 29 

Visit of Fiji Prime Minister Mara (Mara, 
Reagan) 30 

Visit of the Grand Duke of Luxembourg (Grand 
Duke Jean, Reagan) 17 

Visit of Iraqi Deputy Prime Minister (Aziz, 
Reagan) 29 

Visit of West German Chancellor Kohl (Kohl, 
Reagan) 23 


Background Notes 76 

Department of State 76 

Foreign Relations Volume Released 77 


Afghanistan: Five Years of Tragedy 
(Kirkpatrick, text of resolution) 45 

Afghanistan Under the Soviets: Five Years 
(Karp) 42 

Situation in Kampuchea (Kirkpatrick) 57 

Science and Technology 

Commercialization of Outer Space 
(Marshall) 35 

The U.S. and the Caribbean: Partners in Com- 
munication (Dougan) 32 

South Africa. An Update of Constructive En- 
gagement in South Africa (Crocker) ... 5 

South Asia. International Campaign Against 
Drug Trafficking (Thomas) 50 

Space. Commercialization of Outer Space 
(Marshall) 35 


International Campaign Against Drug 
Trafficking (Thomas) 50 

The Resurgence of Democracy in Latin Amer- 
ica (Shultz) 65 


The Resurgence of Democracy in Latin Amer- 
ica (Shultz) 65 

U.S. -Japan Relations: Present and Future 
(Mansfield) 10 

The U.S. in the World Economy: Myths and 
Realities (Morris) 13 

Treaties. Current Actions 74 


Afghanistan: Five Years of Tragedy 
(Kirkpatrick, text of resolution) 45 

Afghanistan Under the Soviets: Five Years 
(Karp) 42 

Reflections on East-West Relations (Burns) 20 

United Nations 

Afghanistan: Five Years of Tragedy 
(Kirkpatrick, text of resolution) . 45 

Afghanistan Under the Soviets: Five Years 
(Karp) 42 

Freedom of the Press: The Need for Vigilance 
(Newell) 62 

International Campaign Against Drug Traf- 
ficking (Thomas) 50 

Perspectives on the U.S. Withdrawal from 
UNESCO (Newell) 53 

Situation in Kampuchea (Kirkpatrick) 57 

Vietnam. Situation in Kampuchea 
(Kirkpatrick) 57 

Western Hemisphere 

Central America: Agriculture, Technology 
and Unrest (Avery) 70 

Contadora: A Process for Central American 
Peace (Sorzano) 59 

Democracy and the Path to Economic Growth 
(Shultz) 1 

International Campaign Against Drug 
Trafficking (Thomas) 50 

The Resurgence of Democracy in Latin Amer- 
ica (Shultz) 65 

The U.S. and the Caribbean: Partners in Com- 
munication (Dougan) 32 

Name Index 

Avery, Dennis T 70 

Aziz, TariqM 29 

Burns, Arthur F 20 

Crocker, Chester A 5 

Dougan, Diana Lady 32 

Grand Duke Jean 17 

Karp, Craig 42 

Kirkpatrick, Jeane J 45, 48, 57 

Kohl, Helmut 23 

Mansfield, Michael J 10 

Mara, Ratu Sir Kamisese 30 

Marshall, Harry R. Jr 35 

Morris, Robert J 13 

Newell, Gregory J 53, 62 

Reagan, President 17, 23, 29, 30, 40 

Robinson, Davis R 24 

Shultz, Secretary 1, 40, 65 

Sorzano, Jose S 59 

Thomas, Jon R 50 

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The Official Monthly Record of United States Foreign Policy / Volume 85 / Number 2095 


35:20*5 F 1985 


February 1985 

Department of State 


Volume 85 / Number 2095 / February 1985 


Afghan refugees 

(UNHCR photo) 

The Department of State Bulletin, 
published by the Office of Public 
Communication in the Bureau of Public 
Affairs, is the official record of U.S. 
foreign policy. Its purpose is to provide the 
public, the Congress, and government 
agencies with information on developments 
in U.S. foreign relations and the work of 
the Department of State and the Foreign 

The Bulletin's contents include major 
addresses and news conferences of the 
President and the Secretary of State; 
statements made before congressional 
committees by the Secretary and other 
senior State Department officials; selected 
press releases issued by the White House, 
the Department, and the U.S. Mission to 
the United Nations; and treaties and other 
agreements to which the United States is 
or may become a party. Special features, 
articles, and other supportive material 
(such as maps, charts, photographs, and 
graphs) are published frequently to 
provide additional information on current 
issues but should not necessarily be 
interpreted as official U.S. policy 


Secretary of State 


Acting Assistant Secretary 
for Public Affairs 



Office of Public Communication 


Chief, Editorial Division 




Assistant Editor 

The Secretary of State has determined that the 
publication of this periodical is necessary in the 
transaction of the public business required by law of 
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periodical has been approved by the Director of the 
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Department of State BULLETIN (ISSN 0041-7610) 
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For sale by the Superintendent of Documents, U.S. 
Government Printing Office, Washington, D.C. 


The Secretary 

1 The Ethics of Power 


4 Visit of Niger's President (Seyni 

Kountche, President Reagan) 

Arms Control 

5 The Stockholm Conference: A 

Report on the First Year 
(James E. Goodby) 

East Asia 

8 Vietnamese Attacks in Cambodia 

(Department Statement) 


9 The Medium-Term Outlook for 

the World Economy (Richard T. 


12 Secretary Visits Europe; Attends 
North Atlantic Council Meeting 
(Statement, News Conferences, 
Final Communique, Extracts 
From Minutes) 

19 U.S. Reaction to Agreement on 

Cypriot Discussions (Depart- 
ment Statement) 

20 U.S. and West Germany's Com- 

mitment to Peace (Joint State- 

Human Rights 

21 Rededication to the Cause of 

Human Rights (President 
Reagan, Proclamation) 

Middle East 

23 U.S. Repeats Request That Amer- 

icans Leave Libya (Department 

Military Affairs 

24 Strategic Defense Initiative 

(White House Statement) 

South Asia 



South Asia and U.S. Foreign 
Policy (Michael H. Armacost) 

Afghanistan: Five Years of Occu- 
pation (Craig Karp, Paul 

United Nations 

36 U.S. Confirms Withdrawal From 

UNESCO (Gregory J. Newell, 
Secretary's Letter) 

Western Hemisphere 

37 Latin America: The Struggle 

to Restore Economic Growth 
(Kenneth W. Dam) 

40 The Role Of Investment in Latin 
America's Economic Future 
(J. William Middendorf II) 

44 U.S., Cuba Resume Normal 

Migration (White House State- 
ment, Department Summary, 
Communique, Minute on Im- 

46 The United States and Cuba 
(Kenneth N. Skoug, Jr.) 

End Notes 

50 December 1984 


51 Current Actions 

Press Releases 

52 Department of State 


53 Department of State 
53 Background Notes 

53 Current Documents Volume 


Americans have always believed deeply in a 
world in which disputes were settled peacefully 
.... But we have learned through hard experience 
that such a world cannot be created by good will 
and idealism alone. We have learned that to main- 
tain peace we had to be strong, and . . . we had to 
be willing to use our strength. 


The Ethics of 

by Secretary Shultz 

Address at the convocation 
of Yeshiva University in New York 
on December 9, 1981+ 1 

Mr. President, Mr. Chairman, my dear 
friend Rabbi Israel Miller— of course, my 
colleague, Foreign Minister/Deputy 
Prime Minister Shamir. Probably all of 
you don't quite realize the closeness that 
foreign ministers tend to feel for each 
other, and I have had quite an associa- 
tion with the Foreign Minister of Israel. 
He's done wonders for the morale of 
those of us in the foreign ministry 
business because, you see, when he was 
promoted from Foreign Minister to 
Prime Minister, I wrote him a little 
note, and I said, "My friend, don't forget 
your fellows still working down there in 
the foreign ministry business." And 
what did he do? He held on to that 
foreign minister portfolio. So he raised 
our standing tremendously. I'm very 
honored to receive this degree from 
Yeshiva University and, of course, in 
such special company and including, of 
course, the company of the Foreign 
Minister of Israel. 

Tonight's Hanukkah dinner com- 
memorates the miracle of 2,100 years 
ago. The flame has been a symbol for 
the Jewish people throughout history. 
Despite centuries of persecution, the 
spirit and the purpose of the Jewish peo- 
ple have burned brightly through the 
darkest times; today they are more vital 
and vibrant than ever. This is a miracle, 
too. But it derives in no small part from 
the Jewish people's faith and dedication 
to your vocation as people of the word 
and people of the book. Your courage 
and moral commitment are an inspira- 
tion and example to all of us who value 
our great common heritage of freedom 
and justice. 

Today, as we meet, a terrible 
tragedy is taking place on the other side 
of the globe. The atrocity of the ter- 
rorist hijacking in Tehran continues— a 
brutal challenge to the international 

community as well as to the most 
elementary standards of justice and 
humanity. One way or another, the law- 
abiding nations of the world will put an 
end to terrorism and to this barbarism 
that threatens the very foundations of 
civilized life. 

Until that day comes, we will all 
have to wrestle with the dilemmas that 
confront moral people in an imperfect 
world. As a nation, we once again face 
the moral complexity of how we are to 
defend ourselves and achieve worthy 
ends in a world where evil finds safe 
haven and dangers abound. 

Today's events make this topic 
especially relevant, but, in fact, it is an 
old issue. As you know so well, 
philosophers and sages have grappled 
with it for centuries, engaging the great 
questions of human existence: what is 
the relationship between the individual 
and his or her God, between the in- 
dividual and his or her community, and 
between one's community and the rest 
of the world? How do we make the dif- 
ficult moral choices that inevitably con- 
front us as we seek to ensure both 
justice and survival? The Bible and the 
commentaries in the Talmud provide 
many answers; they also leave many 
questions unanswered, which accurately 
reflects the predicament of humankind. 

As Americans, we all derive from 
our Judeo-Christian heritage the convic- 
tion that our actions should have a 
moral basis. For the true source of 
America's strength as a nation has been 
neither our vast natural resources nor 
our military prowess. It is, and has 
always been, our passionate commitment 
to our ideals. 

Unlike most other peoples, Ameri- 
cans are united neither by a common 
ethnic and cultural origin nor by a com- 
mon set of religious beliefs. But we are 
united by a shared commitment to some 

February 1985 



fundamental principles: tolerance, 
democracy, equality under the law, and, 
above all, freedom. We have overcome 
great challenges in our history largely 
because we have held true to these prin- 

The ideals that we cherish here at 
home also guide us in our policies 
abroad. Being a moral people, we seek 
to devote our strength to the cause of 
international peace and justice. Being a 
powerful nation, we confront inevitably 
complex choices in how we go about it. 
With strength comes moral account- 

Here, too, the intellectual contribu- 
tion of the Jewish tradition has provided 
a great resource. The Talmud addresses 
a fundamental issue that this nation has 

Americans have always believed 
deeply in a world in which disputes were 
settled peacefully— a world of law, inter- 
national harmony, and human rights. 
But we have learned through hard ex- 
perience that such a world cannot be 
created by good will and idealism alone. 
We have learned that to maintain peace 
we had to be strong, and, more than 
that, we had to be willing to use our 
strength. We would not seek confronta- 
tion, but we learned the lesson of the 
1930s— that appeasement of an ag- 
gressor only invites aggression and in- 
creases the danger of war. Our deter- 
mination to be strong has always been 
accompanied by an active and creative 
diplomacy and a willingness to solve 
problems peacefully. 

. . . Power and diplomacy must always go 
together, or we will accomplish very little in this 
world. Power must always be guided by purpose 
. . . diplomacy not backed by strength will always 
be ineffectual at best, dangerous at worst. 

wrestled with ever since we became a 
great power with international respon- 
sibilities: how to judge when the use of 
our power is right and when it is wrong. 
The Talmud upholds the universal law of 
self-defense, saying, "If one comes to kill 
you, make haste and kill him first." 
Clearly, as long as threats exist, law- 
abiding nations have the right and, in- 
deed, the duty to protect themselves. 
The Talmud treats the more com- 
plicated issue as well: how and when to 
use power to defend one's nation before 
the threat has appeared at the doorstep. 
Here the Talmud offers no definitive 
answer. But it is precisely this dilemma 
that we most often confront and must 
seek to resolve. 

The Need to Combine 
Strength and Diplomacy 

For the world's leading democracy, 
the task is not only immediate self- 

rvation hut our responsibility as a 
protector of international peace, on 
whom many other countries rely for 
their security. 

Americans, being a moral people, 
want our foreign policy to reflect the 
values we espouse as a nation. But, 
being a practical people, we also want 
our foreign policy to be effective. And, 
therefore, we are constantly asking 
ourselves how to reconcile our morality 
and our practical sense, how to relate 
our strength to our purposes— in a 
word, how to relate power and 

How do we preserve peace in a 
world of nations where the use of 
military power is an all-too-common 
feature of life? Clearly, nations must be 
able to protect themselves when faced 
with an obvious threat. But what about 
those gray areas that lie somewhere be- 
tween all-out war and blissful harmony? 
How do we protect the peace without 
being willing to resort to the ultimate 
sanction of military power against those 
who seek to destroy the peace? 

Americans have sometimes tended 
to think that power and diplomacy are 
two distinct alternatives. This reflects a 
fundamental misunderstanding. The 
truth is, power and diplomacy must 

always go together, or we will ac- 
complish very little in this world. Power 
must always be guided by purpose. At 
the same time, the hard reality is that 
diplomacy not backed by strength will 
always be ineffectual at best, dangerous 
at worst. 

As we look around the world, we 
can easily see how important it is that 
power and diplomacy go hand in hand in 
our foreign policies. 

In the Middle East, for instance, the 
United States is deeply and permanently 
committed to peace. Our goal has been 
to encourage negotiation of a peaceful 
settlement of the Arab-Israeli conflict. 
At the same time we have an ironclad 
commitment to the security of Israel. 
We believe that Israel must be strong if 
a lasting peace in the region is to be 
achieved. The Israeli people must be 
sure of their own security. They must be 
sure that their very survival can never 
be in danger, as has happened all too 
often in the history of the Jewish people. 
And everyone in the region must realize 
that violence, aggression, and extremism 
cannot succeed, that negotiations are the 
only route to peace. 

In Central America, aggression sup- 
ported by Nicaragua, Cuba, and the 
Soviet Union threatens the peace and 
mocks the yearning of the people for 
freedom and democracy. Only a steady 
application of our diplomatic and 
military strength offers a real hope for 
peace in Central America and security 
for the hemisphere. We have sought a 
dialogue with the Nicaraguan leadership. 
We have given full support to the Con- 
tadora peace efforts. We have provided 
political and economic support to those 
in the region who are working for peace 
and freedom. But we have also provided 
defense assistance to the region to help 
establish a shield behind which effective 
diplomacy can go forward. 

I don't know whether any of you 
have looked closely at the Great Seal of 
our country that shows the eagle with 
its two talons. In one is an olive branch, 
and the eagle is looking at the olive 
branch, signifying our desire for peace 
and reconciliation. But in the other are 
arrows, symbolizing just this point that I 
have made, right in the Great Seal of 
our Republic. 

It is as true in our relations with the 
Soviet Union, and on the issue of arms 
control, that diplomacy alone will not 
succeed. We have actively sought 
negotiation with the Soviet Union to 
reduce the nuclear arsenals of both 

Department of State Bulletin 


sides, l>ut we have also continued to 
modernise our own forces to ensure our 
security and that of our friends and 
allies. No anus control negotiation can 
succeed in conditions of inequality. Only 
if tin' Soviet leaders see the West as 
determined to modernize its own forces 
will they see an incentive for agree- 
ments setting equal, verifiable, and 
lower levels of armament. 

The Legitimate Use of Power 

The need to combine strength and 
diplomacy in our foreign policies is only 
one part of the answer. There are 
agonizing dilemmas inherent in any deci- 
sion to use our power. But we do not 
have to look hard to find examples 
where the use of power has been both 
moral and necessary. 

A week ago, an election was held on 
the island of Grenada.— the first free 
election held in that country since 1976. 
If we had not shown the will to use our 
strength to liberate Grenada, its people 
would yet be under the tyrant's boot, 
and freedom would be merely a dream. 

Grenada is a tiny country. Although 
there were some tough actions, as 
military campaigns go, it was quickly 
done. But the moral issue it posed was 
of enormous importance for the United 

What we did was liberate a country, 
turn it back to its own people, and 
withdraw our forces. We left— even 
though Grenadians begged us to stay. 
The American people understood im- 
mediately that we had done something 
good and decent in Grenada— something 
we could be proud of— even if a few 
Americans were so mistrustful of their 
own society that they feared any use of 
American power. I, for one, am thankful 
that the President had the courage to do 
it. Yes, Grenada was a tiny island and 
relatively easy to save. But what would 
it have meant for this country— or for 
our security commitments to other coun- 
tries—if we were afraid to do even that! 

We have to accept the fact that 
often the moral choices will be much less 
clearly defined than they were in 
Grenada. Our morality, however, must 
not paralyze us. Our morality must give 
us the strength to act in difficult situa- 
tions. This is the burden of statesman- 

And while there may be no clear 
resolutions to many of the moral dilem- 
mas we will be facing in the future, 
neither should we be seduced by moral 

relativism. I think we can tell the dif- 
ference between the use and abuse of 
power. The use of power is legitimate: 

• Not when it crushes the human 
spirit and tramples human freedom, but 
when it can help liberate a people or 
support the yearning for freedom; 

• Not when it imposes an alien will 
on an unwilling people, but when its aim 
is to bring peace or to support peaceful 
processes; when it prevents others from 
abusing their power through aggression 
or oppression; and 

• Not when it is applied unsparing- 
ly, without care or concern for innocent 
life, but when it is applied with the 
greatest efforts to avoid unnecessary 
casualties and with a conscience troubled 
by the pain unavoidably inflicted. 

Our great challenge is to learn to 
use our power when it can do good, 
when it can further the cause of 
freedom and enhance international 
security and stability. When we act in 
accordance with our principles and 
within the realistic limits of our power, 
we can succeed. And on such occasions 
we will be able to count on the full sup- 
port of the American people. There is no 
such thing as guaranteed public support 
in advance. Grenada shows that a presi- 
dent who has the courage to lead will 
win public support if he acts wisely and 
effectively. And Vietnam shows that 
public support can be frittered away if 
we do not act wisely and effectively. 

Americans will always be reluctant 
to use force. It is the mark of our decen- 
cy. And, clearly, the use of force must 
always be a last resort, when other 
means of influence have proven inade- 
quate. But a great power cannot free 
itself so easily from the burden of 
choice. It must bear responsibility for 
the consequences of its inaction as well 
as for the consequences of its action. In 
either case, its decision will affect the 
fate of many other human beings in 
many parts of the world. 

One need only consider, again, the 
tragic result of the failure to use 
military force to deter Hitler before 
1939. If the democracies had used their 
power prudently and courageously in the 
early stages of that European crisis, 
they might have avoided the awful 
necessity of using far greater force later 
on, when the crisis had become an ir- 
reversible confrontation. 

Those responsible for making Ameri- 
can foreign policy must be prepared to 
explain to the public in clear terms the 

goals and the requirements of the ac- 
tions they advocate. And the men and 
women who must carry out these deci- 
sions must be given the resources to do 
their job effectively, so that we can 
count on success. If we meet these 
standards, if we act with wisdom and 
prudence, and if we are guided by our 
nation's most fundamental principles, we 
will be a true champion of freedom and 
bulwark of peace. 

If one were looking for a model of 
how nations should approach the dilem- 
mas of trying to balance law and justice 
with self-preservation, one need look no 
further than Israel. It is not that Israel 
has made no mistakes in its history. In 
this world, that is too much to ask of 
any nation. But the people of Israel, in 
keeping with their tradition, have en- 
gaged in open, continual, and enlight- 
ened debate over the central question of 
when it is just and necessary to use 
power. It is all the more praiseworthy 
when one considers the great perils to 
its survival that Israel has faced 
throughout its history. Its need for 
strength should be self-evident; yet 
Israelis never consider the issues of war 
and peace without debating in terms of 
right and wrong. 

We in America must be no less con- 
scious of the moral responsibility in- 
herent in our role as a great power and 
as a nation deeply devoted to justice and 
freedom. We look forward to the day 
when empire and tyranny no longer cast 
a shadow over the lives of men and 
women. We look forward to the day 
when terrorists, like the hijackers in 
Tehran, can find not one nation willing 
to tolerate their existence. But until that 
day comes, the United States will fulfill 
the role that history has assigned to us. 

The United States must be a tireless 
sentinel of freedom. We must confront 
aggression. We must defend what is 
dear to us. We must keep the flame of 
liberty burning forever, for all mankind. 

Our challenge is to forge policies 
that keep faith with our principles. We 
know, as the most powerful free nation 
on Earth, that our burden is great, but 
so is our opportunity to do good. We 
must use our power with discretion, but 
we must not shrink from the challenges 
posed by those who threaten our ideals, 
our friends, and our hopes for a better 

'Press release 260 of Dec. 10, 1984. 

February 1985 


Visit of Niger's President 

President Seyni Kountche of the 
Republic of Niger made an official work- 
ing visit to Washington, D.C., Decem- 
ber 10-13, 198b, to meet with President 
Reagan and other government officials. 

Following are remarks made by 
President Reagan and President 
Kountche after their meeting on Decem- 
ber ll. 1 

President Reagan 

It's been an honor and a pleasure to 
welcome President Kountche to 

Our meeting takes place at a time 
when the world's attention is focused on 
the serious food crisis in Africa. Niger 
has not been spared the ravages of the 
drought. However, through the con- 
structive efforts of President Kountche's 
government and the help of the interna- 
tional community, including the United 
States, the effects of the drought in 
Niger will be reduced. 

Those who know President Kountche 
know that food self-sufficiency and the 
well-being of his people are his primary 
goals. He has gone about these objec- 

with pragmatic policies. President 
Kountche represents an impressive ex- 
ample of the kind of serious, concerned 
leadership that Africa will need to over- 
come its economic problems. His reputa- 
tion as a dedicated and capable leader 

been confirmed by his visit to 
lington today. 

In our conversations this morning, 
and at lunch, we covered many of the 
important international problems of the 
day, particularly those concerning 
Africa. We have benefited from Presi- 
dent Kountche's views on the problems 
of drought and economic development in 
the Sahel, as well as the political prob- 
lems of that region. We support Niger's 
efforts to maintain its independence and 
territorial integrity. 

In many areas our views converge. 
On a few others, in a spirit of mutual 
respect, we've agreed to differ. We have 
an excellent bilateral relationship to 
which we both attach considerable im- 

Niger and the United States 
together are committed to the resolution 
of international problems through the 
pursuit of realistic dialogue in interna- 
tional organizations and through the ex- 
ercise of rational economic policies at 
home. And I have assured President 
Kountche of our support for him and his 
country, and I've expressed our admira- 
tion for his accomplishments at home 
and abroad. 

President Kountche 2 

I have just had a very extensive discus- 
sion with President Ronald Reagan. We 
discussed bilateral cooperation, as well 
as African and international issues 
regarding the effects of world recession, 
the persistent drought and famine in 
Africa, and the flashpoints existing in 

almost all the continents. Our discus- 
sions were also especially focused on the 
role of the United States of America in 
the search for a better international 
political, economic, and military balance. 
And I can say that the views of our two 
countries were consistent with each 
other, and there was a good understand- 
ing on most of the issues discussed. 

As far as Africa is concerned, you 
know that we are currently preoccupied 
by the harsh drought that is once again 
affecting extensive areas of our conti- 
nent, the result of which is the reap- 
pearance of hunger in many countries, 
especially in extensive regions of the 
Sahel, in the whole of Africa, and 
eastern Africa. 

I'm glad to note that both President 
Reagan and his Administration are fully 
aware of this situation and that not only 
do they sympathize with us, but they are 
also seriously concerned by the great 
sufferings affecting several thousands of 
Africans that have been seriously hit. 
President Reagan and the American Ad- 
ministration have already provided 
substantial food aid, and Niger is 
grateful to them for that. The President 
also assured me that the United States 
will continue to use significant means to 
decisively help in the crusade against 
hunger and death in Africa. And this is 
essentially in a humanitarian spirit. 

We have also discussed the political 
issues that are currently haunting the 
African countries — Chad, western 
Sahara, but especially southern Africa, 
where the delays in the independence of 
Namibia and the persistence of apart- 
heid in South Africa engender an 
untenable situation in the front-line 
states. President Ronald Reagan and I 
agree that more consultation between 
Africa and the United States of America 
will make it possible to remove the 
obstacles and solve these problems in 
serenity, in justice, and in the rule of 

Besides, I would be right to say that 
through these discussions we were able 
to compare our common desire to see 
peace and security prevail throughout 
the world on the basis of the great 
ideals of the right of the peoples to self- 
determination and liberty, respect for all 
the countries' sovereignty and territorial 
integrity, respect for the countries' 
domestic political choice, and respect for 
the rules of good neighborliness and 
peaceful coexistence among the nations. 

Naturally, we did not lose sight of 
the economic issues, because Niger and 
all Africa are severely hit by the 
economic crisis that unfortunately af- 

Department of State Bulletin 


fects all the continents. In this regard. 
we both recognized that the United 
States has a top role to play in order to 
safeguard peace in the world and, most- 
ly, to save the stability of small nations. 

My conclusion, therefore, is that I 
am fully satisfied with these talks during 
which I congratulated President Ronald 
Reagan for all the efforts that he has 
been making and for the great vigilance 
that he has personally shown concerning 
Niger and regarding the problems of 
Africa. You know that in recent years, 
President Ronald Reagan and his Ad- 
ministration have launched a diversified, 
dynamic, and especially friendly and 
fruitful cooperation with my country. 
And I can say today that the United 
States of America is among our most ac- 
tive and most effective partners. 

As for the President, he appeared as 
a man most devoted to his duties and to 
his nation. Moreover, I have been 
seriously impressed by the fact — by his 
awareness of the global problems, his 
worshipping of liberty and the fulfill- 
ment of man, his determination to build 
an American society ever stronger and 
more prosperous. 

I wish him good health, a continuous 
clearmindedness, a growing clear sight 
to fulfill the well-deserved new term of 
office with which he has just been en- 
trusted by the people, following his 
reelection, that in all aspects was a per- 
sonal triumph and a general satisfaction 
expressed to him by the great American 

The Stockholm Conference: 
A Report on the First Year 

•Made to reporters assembled at the 
South Portico of the White House (text from 
Weekly Compilation of Presidential 
Documents of Dec. 17, 1984). 

2 President Kountche spoke in French, 
and his remarks were translated by an inter- 
preter. ■ 

by James E. Goodby 

Address before L'Institut Francais 
des Relations Internationales in Paris 
on December S, 198^. Ambassador Good- 
by is U.S. Representative to the Con- 
ference on Disarmament in Europe. 

The Stakes 

Last July, Pierre Lellouche of L'Institut 
Francais des Relations Internationales 
wrote in Newsweek magazine that: 
"The Soviets are quietly turning the 
Stockholm forum into a deadly ma- 
chinery to alter to its advantage the 
postwar political and strategic order in 
Europe." Their method, he wrote, was 
to influence Western public opinion 
through "empty but nice-sounding 
declarations"; their objective was to 
establish a "pan-European security order 
from which the United States would 
ultimately be expelled." And he argued 
that "Western weakness . . . makes for 
the steady success of Moscow's 

It is too seldom noticed that the 
Stockholm Conference [on Confidence- 
and Security-Building Measures and 
Disarmament in Europe], in fact, is ad- 
dressing matters which could lead to 
profound changes in the present system 
of European security. Because the con- 
ference is dealing with some of the most 
fundamental issues of Western security, 
it is no exaggeration to say that the 
essential agenda of Stockholm is the 
future political and strategic order in 
Europe. Stockholm is a part of the 
struggle between contending visions of 
the future. Ideas which are being dis- 
cussed there must necessarily be seen as 
potentially contributing to the success of 
one or the other of these visions. 

The Soviet vision we know well. As 
practiced in the past, it has required 
limitations on the sovereignty of 
neighboring states; it is based on the ex- 
pectation of endless confrontation and 
an impulse toward hegemony as the 
ultimate requirement of security. The 
Western vision hopes that, despite deep 
and persisting ideological differences, 
the walls which now divide the com- 
munity of European nations can give 
way to a system more tolerant of diver- 

sity; that security can be found in 
balance and restraint. Of course, we are 
speaking of long historical processes, 
and, of course, the Stockholm con- 
ference is only one of the arenas in 
which this "long twilight struggle" is 
being conducted. But when one hears of 
the seemingly trivial debate in Stock- 
holm over obscure or arcane points, it is 
well to recall, as Mr. Lellouche has done, 
that the ultimate stakes are very high 

The Balance Sheet 

If the stakes in this "great game" are so 
fateful, we must weigh what the Soviets 
have done to create a new strategic 
order in Europe and what degree of suc- 
cess they have achieved. As Pierre 
Lellouche suggests, some Soviet pro- 
posals at Stockholm are "empty but nice- 
sounding declarations." Others have 
more content, but it is of a nature 
designed to disadvantage the West. 
Some proposals, such as those relating 
to chemical weapons and military 
budgets, would cut across useful and 
promising work being done elsewhere. 
Into these categories fall the following 
Soviet proposals: 

• A pledge not to be the first to use 
nuclear weapons; 

• Nuclear-free zones; 

• A freeze and reduction of military 
budgets; and 

• A ban on chemical weapons in 

And, indeed, as Mr. Lellouche sug- 
gests, these proposals have the potential 
for altering the global balance of power. 

But the fact is that there is no 
ground swell of support at Stockholm 
for this Soviet program or for any in- 
dividual proposal in it. The neutral and 
nonaligned countries have introduced a 
series of proposals, the thrust of which 
is quite different from the direction 
taken by Moscow. The countries of the 
Atlantic alliance have patiently exposed 
the shortcomings in each of these Soviet 
proposals. No one can credibly contend 
that the Soviets have succeeded in turn- 
ing Stockholm into a propaganda plat- 
form which has deceived public opinion. 

February 1985 


The press, when it covers Stockholm, 
quite sensibly has found the stock items 
of the Soviet program to be not very in- 
teresting. Moscow has tried hard to 
steer Stockholm toward a polemical 
debate about nuclear weapons. As the 
party which last year chose to turn its 
back on nuclear negotiations, however, 
the Soviet case has not seemed very 

Now we should ask how Western 
ideas are faring at Stockholm. Norway's 
Johan Hoist wrote recently that: 
"Confidence-building measures should be 
viewed as elements in a process for 
peaceful change of the post-war political 
order in Europe towards a more open, 
equitable, and cooperative order." These 
words elegantly sum up the larger aims 
of the proposals which the Atlantic 
alliance has introduced in Stockholm. 
The West has held that Stockholm can 
be a place for serious arms control 
business and that this should be based 
on the principle of cooperation among all 
participants on an equal footing. An ap- 
proach based on mutual, rather than 
unilateral, advantage in the building of 
confidence and the enhancement of 
stability implies a relationship among all 
the nations of Europe which is anti- 
thetical to the instinct for hegemony. 
Among other things, the proposals of 
the Atlantic alliance emphasize the need 
for accurate perceptions of the intent of 
military operations as a remedy for 
miscalculation and a deterrent against 
surprise attack. This objective requires 
positive cooperation, since it concerns 
the act of reassurance. And that means 
greater openness or, as the Belgian Am- 
bassador at Stockholm nicely put it, the 
"demystification" of military activities on 
the Continent of Europe. 

In contrast to the polite but rather 
indifferent reaction to the supposedly 
eye-catching wares of the Soviet Union, 
the down-to-earth ideas which have been 
advanced by the countries of the Atlan- 
tic alliance are in the mainstream of the 
conference. The neutral and nonaligned 
group has presented very similar pro- 
posals. The debate in the conference has 
been focused primarily on the theme of 
how to strengthen the practical confi- 
dence-building measures first developed 
in the Helsinki Final Act of 1975. The 

n .'. e tern Europe almost 
unanimously has seen the purpose of the 

I holm conference as that of reduc- 
ing 'In- risk of war through implement- 

practical measures designed to pre- 
vent id foster practical forms of 

cooperation. In short, Western ideas and 
the specific methods of implementing 
those ideas seem to be accepted as the 
real business of Stockholm. 

I turn now to a description of some 
of the specific Western proposals and 
objectives in Stockholm and to a few of 
the key developments of the year just 

A New Approach to Arms Control 

Stockholm is not only about political 
visions; it is also and most immediately 
about a new approach to arms control. 
In the last quarter of a century, very 
few arms control efforts have been 
aimed at eliminating the proximate 
causes of war, such as crises arising 
from misperceptions. Arms control 
negotiations typically have dealt with 
reducing the perceived threat, whether 
the threat is perceived as coming from 
arsenals of nuclear warheads or from 
the levels of conventional forces in Cen- 
tral Europe. The few arms control at- 
tempts to deal directly with the "prox- 
imate" causes of war have been impor- 
tant but limited in scope and objec- 
tives—the Moscow-Washington "Hot 
Line" and the U.S. -Soviet "Incidents at 
Sea" Agreement being two examples. 
No comprehensive negotiation has yet 
succeeded in putting into place ar- 
rangements designed to prevent crises 
or to contain or resolve them, should 
they occur. This, however, is exactly the 
aim of the Western nations represented 
at Stockholm. Success in achieving this 
goal would encourage natural and nor- 
mal relations among the countries com- 
prising the whole of Europe. 

Another way of considering the dif- 
ference between "classical" arms control 
and the new ideas being discussed in 
Stockholm is that the former has dealt 
with the levels of forces whereas the lat- 
ter deals with the operations of military 
forces. "Classical" arms control negotia- 
tions typically try to establish long-term 
stability, for example, by providing 
greater predictability about the types 
and levels of strategic forces that will be 
maintained over a future span of time. 
But in Stockholm, the allies are urging 
agreements which will promote short- 
term stability— that is, stability during 
periods of intense and possibly turbulent 
international political developments 
which might require urgent attention. 
The aim would be to have procedures in 
place which would prevent misunder- 
standings which could lead to dangerous 

escalation and procedures which would 
assist nations in keeping potentially 
dangerous situations under control. How 
well the West has done in rallying sup- 
port for this point of view may be seen 
in the following review of other pro- 
posals introduced in Stockholm. 

During 1984, five sets of proposals 
were submitted to the Stockholm con- 
ference. In addition to those of the 
Atlantic alliance, proposals were ad- 
vanced by Romania, by the neutral and 
nonaligned countries, by the Soviet 
Union, and by Malta. 

Romania's proposals were important 
for several reasons. Its ideas included 
elements based on the Warsaw Pact's 
political proposals, but also included 
were interesting approaches to con- 
fidence-building designed to strengthen 
the measures agreed to in the Helsinki 
Final Act. One of the Soviet Union's 
proposals also provided for improve- 
ments in "Helsinki-style" confidence- 
building measures. The proposals sub- 
mitted by the neutral and nonaligned 
countries deserve special attention 
because they have helped to define the 
"center of gravity" of the Stockholm con- 
ference. Nine of the twelve proposals in- 
cluded in their approach were similar to 
those introduced by the allies. The three 
others went beyond the alliance's ap- 
proach, in that they called for specific 
limitations or constraints on the way 
military forces could be deployed. In so 
doing, the neutral countries identified a 
"gray zone" that lies between the 
stabilizing intent of the alliance's pro- 
posals and the arms reduction aims of 
"classical" arms control. Their approach 
deserves— and is receiving— serious 

The point which emerges from this 
is clear: there is a significant degree of 
convergence between all of these pro- 
posals and those made by the allies. 

The Mechanics of Underwriting 

The nations of the Atlantic alliance have 
used as their common point of departure 
the confidence-building measures of the 
1975 Helsinki Final Act. Those measures 
were modest experiments; they needed 
to be improved substantially. In their 
proposals, the Western countries are 
seeking to negotiate agreements that 
will, among other things, build on the 
rudimentary notification and observation 
procedures in the Helsinki Final Act. By 
mandate, the Stockholm conference is 

Department of State Bulletin 


already advancing significantly from the 
Final Act by mutual agreemenl of all 
the countries, Stockholm is dealing with 
the whole of Europe, from the Atlantic 
to the Urals, whereas the Final Act e\ 
empted most o( the European part of 
the Soviet Union. 

The countries o( the Atlantic alliance 
are seeking to extend notification of 
maneuvers to include alerts, amphibious 
operations, and mobilization. They are 
urging that military units, specifically 
the division rather than levels of man- 
power, should be the basis for notifica- 
tions. They are proposing an exchange 
of information as a standard against 
which to judge the significance of out-of- 
garrison military activities. Onsite in- 
spection to clear up questions arising 
from implementation of this agreement 
and to defuse potential crises should be 
a part of a strengthened regime for 
enhancing stability. Means for urgent 
communications among the participants 
in this system could also serve to deter 
or resolve crises. The allies are seeking 
longer advance notice of military ac- 
tivities and a lower threshold for 
notification than was provided in the 
Helsinki Final Act. 

In addition, the Western countries 
are proposing to exchange annual 
forecasts of military operations within 
the zone. This annual forecast will have 
a constraining effect, in that it will be 
more difficult for a military exercise 
suddenly to be mounted for the purpose 
of political intimidation. Together with 
mandatory observation of all notified 
military activities, these measures would 
exert pressure for stability in Europe. 
By establishing normal patterns of 
military activities for military operations 
in Europe and arrangements for react- 
ing jointly to situations outside these 
"norms," we would create conditions 
which could facilitate the resolution of 
potential crises. 

Johan Hoist has suggested that: "We 
should look at confidence-building 
measures as management instruments 
designed to reduce the pressure from 
arms on the process of politics during 
peacetime and on decision-making in 
crisis and war." The alliance's proposals 
are designed to do exactly that. If a 
system can be established which pro- 
motes stability, which damps down 
potential crises, which discourages the 
use of military force for political in- 
timidation, and in which crises can be 
contained and quickly resolved, we will, 
indeed, have "reduced the pressures 
from arms on the process of politics." 

Some Perspectives on 1984 

The foreign ministers of the 35 par- 
ticipants opened the conference in 
January 1984 — a period that marked, in 
retrospect, the beginning of a transition 
in Soviet-American relations. President 
Reagan's major policy statement on 
Soviet-American relations was delivered 
on January Hi; it was followed im- 
mediately by talks between Secretary 
Shultz and Foreign Minister Gromyko. 
Although icy winds from the East were 
lowering temperatures everywhere, the 
seeds of future negotiations were even 
then being planted. 

Perhaps the most important political 
impetus which the Stockholm conference 
received during the year was President 
Reagan's speech of June 4 in Dublin. In 
that speech the President, in effect, 
outlined the shape of an ultimate agree- 
ment when he mentioned the possibility 
of discussing a Soviet-sponsored pro- 
posal regarding non-use of force if the 
Soviets would negotiate concrete 
confidence-building measures such as 
those which the alliance and the neutral 
countries had been advocating. 

In the four sessions which were held 
during 1984, however, the Soviets 
showed little inclination to accept the 
alliance's invitation to a negotiation. But 
just today, December 3, all participants, 
including the Soviet Union, have agreed 
on a working structure which should en- 
courage serious and detailed negotia- 
tions. This could be a turning point. The 
opportunity now exists, more than ever 
before, for the "flexible give-and-take 
negotiating process" President Reagan 
called for in September. The portents 
are increasingly favorable, and we hope 
that the Soviets will use this new oppor- 
tunity to work out agreements within 
the range of proposals which are truly 
negotiable at Stockholm. There has 
existed for some time a substantive 
"point of departure" for negotiations 
which many delegations have already 
discerned; now there is available to the 
negotiators a structure to facilitate 
detailed comparison of proposals and to 
begin the process of bridging the gaps. 

It should be noted that many delega- 
tions in Stockholm have remarked that 
all the problems to which individual na- 
tions attach high priority cannot possibly 
be dealt with in Stockholm. But these 
matters need not go unattended— quite 
the contrary. For example, President 
Reagan, in speaking before the United 
Nations on September 24, offered some 
ideas which would help to build con- 
fidence bilaterally between the United 

States and the Soviet Union. It is ob- 
vious that the Stockholm conference is 
not the universe. Many things can be 
done bilaterally or in other forums to 
improve confidence between states; 
these could reinforce measures agreed 
to in Stockholm. 

Summing Up 

Today, as we near the end of the con- 
ference's first year, it seems that the 
West is not doing too badly, as meas- 
ured against the basic thesis of Pierre 
Lellouche. The weakness to which he 
referred has not been in evidence. 
Perhaps we may even be permitted to 
say that the restoration of America's 
sense of strength, purpose, and con- 
fidence had something to do with this. 

The conference appears to have ac- 
cepted a Western concept of security. 
Plenty of declarations have been heard 
from the East, but the majority of the 
conference participants appear firmly 
committed to serious negotiations on 
practical measures designed to enhance 
stability in Europe. A consensus-building 
process has been at work which points 
to an outcome based on combining a 
reaffirmation of the renunciation of 
force with practical confidence-building 
measures intended to give real expres- 
sion to that principle. And the idea of a 
more open continent is even more firmly 
entrenched than ever. 

The Soviets, even if they use the 
new working structure to begin to ham- 
mer out a consensus, certainly will con- 
tinue to offer the West self-serving 
panaceas for Europe's security prob- 
lems. The temptation to seize easy 
results at the expense of meaningful 
results will always be there, and it will 
always be exploited to the disadvantage 
of the West, if possible. But the first 
year of discussions suggests that, if the 
West remains united, meaningful results 
are possible in Stockholm. 

The meeting between Secretary 
Shultz and Foreign Minister Gromyko in 
January will, we hope, lead to a common 
understanding as to the subject and ob- 
jectives of negotiations on a whole range 
of nuclear issues. We hope, also, that in 
this same spirit the nations participating 
in the Stockholm conference may be 
able, in the course of 1985, to make 
progress toward more stable and coop- 
erative relations and an easing of 
military confrontation. Whatever the 
success of other negotiations in reducing 
the level of arms and men, formidable 
and potentially devastating military 
power will exist for a long time to come. 

February 1985 


While our nations strive to reduce the 
level of armaments, we must also strive 
in Stockholm to reduce to the vanishing 
point the risk of a war that no one 

As the Stockholm conference con- 
vened nearly 1 year ago, President 
Reagan spoke of Soviet-American rela- 
tions in a way which, I think, sums up 

the American attitude toward this enter- 
prise. He said: 

Strength and dialogue go hand in hand. 
We are determined to deal with our dif- 
ferences peacefully, through negotiations. 
We're prepared to discuss the problems that 
divide us and to work for practical, fair solu- 
tions on the basis of mutual compromise. We 
will never retreat from negotiations. ■ 

Vietnamese Attacks in Cambodia 

DEC. 26, 1984 1 

Six years ago on Christmas Day, Viet- 
nam invaded Cambodia and quickly oc- 
cupied most of the country. Yesterday 
Vietnam marked the anniversary of its 
invasion by launching attacks, backed by 
armor and artillery, against encamp- 
ments near the Thai-Cambodian border 
which are home to more than 85,000 
Cambodian civilians who have fled there 
from Vietnam's oppression of their 
homeland. More than 60,000 Cambodian 
civilians were already in temporary 
evacuation sites in Thailand as a result 
of Vietnamese attacks on their camps 
this year. 

When it invaded Cambodia in 1978, 
Vietnam claimed that it had acted to 
save the Khmer people from the Khmer 
Rouge under Pol Pot. Hanoi still claims 
that its occupation is necessary to pre- 
vent the return of the Khmer Rouge. 
Yet during this dry season, Vietnam's 
offensive along the border has been 
directed solely at camps loyal to the non- 
communist Khmer People's National 
Liberation Front (KPNLF), led by 
former Prime Minister Son Sann. 

Vietnam's continuing aggression in 
Cambodia, directed chiefly against 

civilian camps and noncommunist 
military forces, is contemptible. The 
Cambodian people, after so many years 
of war, should be allowed to choose their 
own government and to live in peace. 
Unfortunately there is no sign that 
Hanoi is prepared to accede to the world 
community's call for a Vietnamese 
withdrawal and the reestablishment of 
Cambodian sovereignty through free 
elections under international auspices. 
Hanoi still rejects this formula in 
defense of the UN General Assembly, 
which this year endorsed it by 110 votes 
to 22. The United States again urges 
Hanoi to recognize that a negotiated 
political settlement in Cambodia is in 
Vietnam's own national interest. 

The United States wishes to express 
its appreciation to the Royal Thai 
Government, the UN Border Relief 
Operation (UNBRO), and the Interna- 
tional Committee of the Red Cross 
(ICRC) for their efforts to assist the 
Cambodian civilians again made 
homeless by Vietnamese attacks. We 
hope the international community will 
join us in continuing our support for 
Cambodian relief efforts. 

*Read to news correspondents by acting 
Department spokesman Alan Romberg. ■ 

Department of State Bulletin 


The Medium-Term Outlook 
for the World Economy 

by Richard T. McCormack 

Address before the Austrian Society 
for Foreign Policy and International 
Relations in Vienna on November 22, 
198i. Mr. McCormack is Assistant 
Secretary for Economic and Business 

The economic recovery in the OECD 
[Organization for Economic Cooperation 
and Development] is now completing its 
second year, with inflation still well 
down, and appears likely to continue in 
1985. The international financial system 
seems to have weathered the worst of 
the debt crisis. Yet there are still 
blemishes on the economic scene. 
Serious concerns have been expressed 
that the recovery is not solidly based 
and that we have only papered over our 
most serious economic problems, par- 
ticularly including the international debt 
situation. Have we, in fact, found the 
key to noninflationary growth and 
lasting prosperity? Is the debt crisis well 
on its way to a solution? Or have we, on 
the contrary, built the recovery on weak 
foundations that are, even now, crum- 
bling beneath our feet? Let me try to 
put this question into a medium-term 

The Prologue 

As the decade of the 1980s began, the 
world economy was in a morass of stag- 
flation. OECD countries, reeling from 
the impact of the second oil shock and 
suffering from undisciplined financial 
policies, were experiencing high rates of 
inflation, sluggish growth, and weak 
productivity performance. Profitability 
and incentives to undertake productive 
investments were weak. Interest rates 
were on their way to unprecedented 
levels. A good number of important de- 
veloping countries were burdening them- 
selves with unsustainable accumulations 
of debt. 

In the 1980s the economic strategy 
of the OECD countries changed direc- 
tion. While there were many differences 
in policies and timing, OECD countries 
generally adopted a broad strategy to 
reestablish financial stability and to lay 
the foundation for durable growth. 

Inflation was to be lowered, primarily 
through more disciplined monetary 
policies, and profitability restored, with 
an eye to a sustainable, investment-led 
recovery. In some countries, including 
the United States, there was to be more 
use of market forces to allocate re- 
sources efficiently. 

The transition to noninflationary 
growth has been a bumpy one. Anti- 
inflationary monetary policies clashed 
with an inflation deeply entrenched in 
expectations and institutional arrange- 
ments. Interest rates shot up further, 
and recession hit, driving unemployment 
rates to the highest levels of the post- 
war era. Developing countries in heavy 
debt were caught in a squeeze between 
high interest rates and debt- servicing 
burdens on one hand, and shrinking 
markets for their exports on the other. 
Extraordinary financial arrangements 
had to be made for the hardest hit of 
these debtor countries while, at the 
same time, sharp and painful adjust- 
ments in their external accounts had to 
be accomplished. 

But the strategy began to pay off in 
1983. In the United States, inflation had 
come down from over 13% to less than 
4%, and interest rates had fallen. A 
vigorous recovery began, pulling along 
the rest of the industrialized countries in 
its wake and offering great assistance to 
the trade position of debtor countries. 
U.S. growth in 1984, compared with 
1983, will be almost 7%. OECD growth, 
excluding the United States, was only 
1.8% in 1983 but should register close to 
3.5% this year. Inflation in the OECD 
area, which had averaged around 13% in 
1980, has now fallen to about 5%, and 
intercountry differences have narrowed. 
Some of this decline reflects weakness in 
oil prices and non-oil commodity prices, 
but there is also considerable encourag- 
ing evidence of more wage moderation 
than one would have expected, even 
given high levels of unemployment. Cor- 
porate profitability has recovered sharp- 
ly, easing liquidity and cash-flow strains. 
And in a number of important coun- 
tries—especially in the United States but 
also in Japan, the United Kingdom, and 
Germany— fixed investment has been (or 
is now) recovering well, even though 

real interest rates have remained high. 
With inflation showing no signs of ac- 
celerating (and, indeed, still diminishing 
in some countries) and with the U.S. ex- 
pansion easing off to more sustainable 
rates, most forecasters are predicting 
continued widespread growth in 1985. 

Finally, with the help of the OECD 
recovery, active international financial 
cooperation, and strenuous adjustment 
efforts on the part of some key debtor 
countries, the financial situation of most 
debtor countries is improving— and im- 
proving dramatically in some cases. 
Thus, the OECD strategy for growth 
and the international strategy for deal- 
ing with the debt crisis appear to be suc- 
ceeding. Why, then, is there so much 

The answer is that three principal 
problem areas cloud the medium-term 
outlook: the imbalance in OECD growth; 
continued strains and risks for debtor 
LDCs [less developed countries]; and 
protectionist pressures which threaten 
the world trading system and the sus- 
tainability of the global recovery. These 
problems, all sharing a structural char- 
acter, must be dealt with if we are to 
cap off our anti-inflation successes with 
a period of sustained growth. 

Imbalances in the OECD Recovery 

In the first 2 years of the recovery, the 
United States, accounting for about 40% 
of OECD GNP [gross national product], 
has accounted for about 70% of OECD 
growth in demand. For the year 1984 
alone, real total domestic demand in the 
United States will probably be up by 
about 8.5%; of this amount, about 1% 
percentage points have gone into a 
widening external deficit on goods and 
services, which served to spread the re- 
covery abroad. The growth in real 
domestic demand in Europe, on the 
other hand, will probably be less than 
2% this year. Both Europe and Japan 
have depended heavily for their growth 
on the rapid expansion of export mar- 
kets in North America and their im- 
proved competitive position due to the 
strong dollar. 

February 1985 


This situation served to ignite the 
recovery, but it cannot continue to sus- 
tain it indefinitely. U.S. economic 
growth is now clearly slowing to a more 
sustainable pace. We are expecting 
growth of about 4% next year; some 
private forecasters put it somewhat 
lower. Prospects for the dollar are more 
problematical, but most forecasters ex- 
pect some decline in its exchange value 
in 1985. Thus, other OECD countries 
will need to generate more of their own 
steam for their recovery in order to 
replace the more moderate forward 
thrust coming from demand generated 
in the United States. (We expect the 
U.S. current account balance to deterio- 
rate much less from now on into 1985 
than it has up until now during the re- 
covery.) The sluggishness in internally 
generated European demand is, there- 
fore, a reason to worry about the 
robustness of the OECD recovery. More- 
over, it is also a cause of great concern 
that the recovery in Europe has not suc- 
ceeded in making any dent in the high 
European unemployment level. 

To some extent, Europe's lagging re- 
covery may reflect the fact that certain 
key countries lagged behind in their ap- 
plication of anti-inflation policies. But, a 
common perception from outside Europe 
(and shared by many Europeans) is that 
the problems of sluggish domestic de- 
mand and high European unemployment 
are now largely structural in nature, in- 
volving market rigidities that hinder sig- 
nificant private sector growth and job 
creation. These include, for example, 
disincentive effects of high marginal 
rates of taxation on labor and capital in- 
comes, excessive job security ar- 
rangements that discourage labor mobili- 
ty and make it risky to take on addi- 
tional workers, and subsidies to declin- 
ing industries that are paid by taxing 
away the profits of more competitive 
firms. High real wage rates may also 
have encouraged a labor-saving bias in 
investment. Structural rigidities become 
even more important when rapidly 
changing relative prices (e.g., for 
energy) and demand patterns (e.g., for 
steel) require major changes in resource 
allocation in response to market forces. 
I ask for your assessment of this diag- 
nosis and of prospects for dealing with 

I am aware that many European ob- 
ervers would add to this set of diffi- 
culties high real interest rates, which 

e of them would blame largely on 
high rates in the United States and, in 
turn, oil high U.S. budget deficits. 

We would argue that other factors 
(such as strong investment demand 
stimulated by tax incentives) are, at the 
least, more important explanations of 
U.S. interest rate levels and the strong 
dollar than is the U.S. budget deficit. 
Moreover, high European interest rates 
are probably still reflecting— as, indeed, 
they still are in the United States— mar- 
ket skepticism as to the permanency of 
the lowering of inflation. In sum, we 
believe that European factors are pri- 
marily responsible for European prob- 

Nevertheless, I emphasize that we 
recognize that reducing our budget defi- 
cit is important not only for the sustain- 
ability of our own economic growth but 
for global economic health. The United 
States should not, certainly in the long 
run, be depending so heavily on import- 
ing foreign savings to finance domestic 
investment. Our level of net (private 
plus public) saving must be increased. 
The Administration will be making 
strenuous and inevitably painful efforts 
to accomplish this. 

International Debt Prospects 

Continued progress in the resolution of 
international debt problems is clearly 
vital to the sustainability of the global 
economic recovery. Early in the debt 
crisis it was widely thought that there 
was danger of imminent widespread de- 
fault and financial collapse, so that 
radical measures were necessary; these 
voices have subsided. But now our suc- 
cesses in short-term financial ar- 
rangements and balance-of-payment 
adjustment have convinced a good many 
observers that, despite persisting prob- 
lems in some key debtor countries, the 
problem is largely solved. Other com- 
mentators feel, however, that we have 
merely postponed the problem and that 
more radical solutions will eventually 
need to be found. 

In my view, the truth is somewhere 
in between. I believe that our present 
case-by-case management of the problem 
has been sound, that real progress has 
been made, but that long-term resolution 
of the problem is still some ways off. 

Two principal questions remain 
about our present success. 

First, is our present success in re- 
ducing these payments deficits based on 
a draconian depression of activity and 
incomes that is not sustainable either 
socially or politically? 

Second, is the present outlook viable 
only under the most favorable assump- 
tions and vulnerable to new shocks, such 
as OECD recession or higher interest 

Let me lay a foundation for our 
understanding of these questions. The 
origins of the international debt crisis 
are usually described as a combination 
of events— overzealous lending by the 
banks and imprudent borrowing by debt- 
or countries, both based on overopti- 
mistic assumptions about the future, 
together with the combination of high 
interest rates and recession that accom- 
panied the disinflationary process in the 
industrialized economies. The short-run 
solution is usually described in terms of 
rescheduling, filling financing gaps, and 
rapid current account adjustment. To 
understand the requirements for a last- 
ing solution, however, I would like to 
discuss the problem from a somewhat 
different perspective— the requirements 
for the international capital-transfer 
process to work effectively, how it broke 
down for some countries, and how it can 
be restored. 

I will take it as given that our ulti- 
mate goal is long-term growth and 
higher living standards for the peoples 
of the developing countries. We in the 
Western developed countries have an 
important economic and political stake 
in the achievement of this goal. An in- 
ternational flow of investment is one 
major contribution— not the only one, 
but an important one— that we can make 
to this process. 

Simply stated, three elements are 
necessary for the international flow of 
investment to work effectively for the 
mutual benefit of capital exporting and 
importing countries. 

First, the capital flow must be in- 
vested in such a way as to bring about, 
through higher output and income 
growth, the means whereby interest 
payments— or adequate return to foreign 
equity— can be met, leaving a net income 
gain for the capital-importing country. 

Second, sufficient resources in the 
recipient country must be efficiently de- 
ployed to the external sector so as to 
generate the foreign exchange to meet 
debt service payments. 

Third, this internal adjustment must 
be accompanied by a complementary ad- 
justment in the trade patterns and 
economies of trading partners, again to 
permit the means for debt-service 
payments to be earned. 


Department of State Bulletin 


Two additional prescriptions should 
be added: equity investment should be 
encouraged to avoid sole reliance on 
debt finance with its less flexible debt- 
servicing needs; second, external capital 
must be used to supplement, not re- 
place, domestic savings as a source of 
capital formation. 

In fact, during the 1970s, the 
capital-transfer process worked very 
well in a considerable number of coun- 
tries. In several capital-importing coun- 
tries of the Far East, in particular, equi- 
ty investment was welcomed, capital 
was wisely invested, economies were 
made open and responsive to interna- 
tional market forces, and resources were 
deployed efficiently to the external sec- 
tor. The capital transfer process worked 
well. Even through the unfavorable ex- 
ternal environment of the early 1980s, 
these countries continued their growth 
and today continue to enjoy access to 
financial markets. 

In other countries the requirements 
of effective capital transfer were not so 
well observed, and the process worked 
less well. Protection of domestic in- 
dustry and overvalued exchange rates 
drew resources away from the external 
sector. Inefficient state-owned enter- 
prises and artificially controlled domestic 
prices hindered the efficient deployment 
of resources. Artificially controlled in- 
terest rates discouraged saving and en- 
couraged capital flight. International 
direct investment was discouraged at 
the cost of access to technology, train- 
ing, and marketing know-how. With less 
flexible and efficient economies, these 
countries were particularly hard hit by 
the adverse international developments 
of the early 1980s. They borrowed even 
more heavily rather than take the 
necessary adjustment measures. These 
became the debt-crisis countries. 

There has been great progress in 
achieving adjustment of the unsustain- 
able external payments positions of the 
major debtors. These gains have been 
made as the result of improving external 
markets, lower interest rates, and pain- 
ful internal adjustment measures by 
debtor nations. The IMF [International 
Monetary Fund] shows the aggregate 
current account deficit of the "non-oil 
developing countries" (which strangely 
includes Mexico) falling from $108.5 
billion in 1981 to $45 billion in 1984. The 
two largest debtor countries, Mexico and 
Brazil, according to recent estimates 
published by Morgan Guaranty, account 

for much of this improvement. Mexico 
has gone from a $12.5 billion deficit in 
1981 to an estimated $3.9 billion surplus 
in 1984, while Rrazil has trimmed its 
deficit from $11.7 billion to $2.3 billion. 
Morgan Guaranty's selection of 16 major 
debtor countries experienced a positive 
swing of $56.2 billion in their balance of 
goods and noninterest services only 
partly offset by an increase of $13.4 
billion in interest payments. As a result, 
in 1984 these countries in the aggregate 
are estimated to be covering 79% of 
their external interest payments with a 
surplus on merchandise trade and non- 
interest services. 

Banks, for their part, have been 
building up their capital and slowing 
growth of loans to LDCs so that loan-to- 
capital ratios have been reduced. The 
recently agreed medium-term restructur- 
ing of Mexican debt, with more favor- 
able interest terms, is an appropriate 
reward to Mexican adjustment efforts 
and will ease planning problems that 
stemmed from the uncertainties that 
had accompanied the year-to-year ap- 
proach. A similar multiyear agreement 
with Venezuela has also been reached in 
principle, and Brazil is expected to begin 
talks on a multiyear arrangement soon. 
All these agreements are designed so as 
to strengthen the role of the IMF in con- 
tinued close monitoring of economic 
policies and performance. 

There are, of course, countries with 
severe debt problems where adjustment 
actions have been far less impressive 
and where much more needs to be done. 
In several countries, efforts to adjust 
have been seriously hampered or 
frustrated by the inevitable political and 
social strains as the required measures 
threaten economic interests. In a few 
countries, adjustment has also been 
hampered by adverse export price move- 
ments, such as Chile's problems with 
copper prices or the effect on oil-export- 
ing countries of recent weakness in the 
oil market. These countries need to do 
more to promote export diversification. 

Moreover, even the success of coun- 
tries like Mexico and Brazil would be il- 
lusory if the improvement in their exter- 
nal accounts resulted solely from cutting 
imports through quantitative restrictions 
and compression of demand. Such a 
means of adjustment would be neither 
efficient nor sustainable, socially or 
politically. It would not correct the 
fundamental failure of the capital trans- 
fer process. In fact, at first, most of the 
gains did come from import cutbacks ac- 

companied by falling economic activity. 
Nearly all of the major Latin American 
debtor countries suffered declines in real 
GDP [gross domestic product] over 

However, there is now increasing 
evidence of adjustment of a more funda- 
mental kind. Some of the savings in im- 
ports reflect import substitution, as a 
result of changes in relative prices. With 
the revival of OECD demand, more of 
the gains have recently come on the ex- 
port side. The IMF's adjustment pro- 
grams — which are sometimes falsely 
characterized as enforcing austerity 
alone — are, in fact, largely focused on 
freeing up internal markets and achiev- 
ing realistic relative prices and exchange 
rates, so an efficient capital-transfer 
process can resume. Positive growth is 
now reviving in most of the troubled 
debtor countries. Although real per 
capita incomes still remain below pre- 
crisis levels, the successfully adjusting 
countries can expect to achieve healthy 
growth in the coming years — so long as 
they continue their long-term adjust- 
ment policies. 

It will take political courage and 
determination for necessary steps to be 
taken. But the choice is not between ad- 
justment and no adjustment. It is be- 
tween orderly adjustment now — 
cushioned whenever possible by external 
support — and the extreme, disorderly, 
and much more painful adjustments that 
will otherwise inevitably be forced by 
precipitous economic decline. 

The second question on the debt 
issue involves the vulnerability of the op- 
timistic adjustment scenario to adverse 
external developments. There can be no 
question that maintenance of OECD 
growth is vital for successful further ad- 
justment to take place. So far, the 
United States has provided the principal 
source of growing markets for LDCs. 
For example, over two-thirds of the in- 
crease in non-OPEC LDC exports from 
the prerecovery period to 1984 went to 
the United States and almost 85% of the 
increase in Latin American exports. 

As to the future, the scenario does 
not have to be unreasonably optimistic 
to generate enough export growth to 
allow quite satisfactory adjustment and 
growth in LDCs. For example, a 
Morgan Guaranty "base case" assumes 
slowing OECD growth to 3.3% next 
year, only 1.5% in 1986 (a small reces- 
sion), and 2.5% thereafter. This is suffi- 
cient to allow Brazil, for example, to 
grow at a 5% rate while still continuing 
to reduce their current account deficit. 

February 1985 



Slowing growth would also make it- 
self felt in lower interest rates — as, in- 
deed, is now occurring in the United 
States — which would be at least partly 
offsetting. Indeed, as the U.S. economy 
has been slowing to a more moderate 
rate of growth, interest rates have also 
subsided substantially. Our rough calcu- 
lations indicate that the decline in in- 
terest rates just since their peaks of this 
last summer will save LDCs more than 
$10 billion in annual interest charges. In 
fact, for some countries with especially 
high debt-to-export ratios, the short-run 
interest rate relief associated with the 
slowdown will more than compensate for 
the trade effects of a growth slowdown 
limited in duration and extent. What we 
must not permit — and what we need not 
permit — are more apocalyptic scenarios 
involving higher interest rates and deep 
recession, which would gravely damage 
prospects for LDC adjustment even with 
good adjustment policies on their part. 

The Threat of Protectionism 

As you will recall, the third element I 
cited in a successful capital-transfer 
process must be adjustment on the part 
of the trading partners of those debtor 

countries seeking to earn enough abroad 
to service their external debt. This 
means, of course, that in addition to the 
gains in our own standards of living and 
efficiency, we have another reason— the 
health of the international financial 
system— to ward off protectionism. De- 
veloping countries have benefited great- 
ly from expanding markets in the 
recovering OECD economies, particular- 
ly in the United States where markets 
have expanded rapidly and remained 
relatively open. Still, LDC exports have 
been impeded in a good number of cases 
by various sorts of restrictive trade 
policies adopted by OECD countries. 

Unfortunately, several factors have 
worked against a freer trading system: 
the recession, uneven recovery, still high 
unemployment, and major movements in 
exchange rates have all contributed to 
protectionist pressures. Restrictive 
policies have increased in certain key 
manufacturing sectors— textiles, 
clothing, steel, and autos— as well as 
persisting strongly in agriculture and 
services. Subsidies have been used to 
ward off the effect of market forces on 
industrial structure. Such policies direct- 
ly reduce living standards, worsen the 
threat of renewed inflation, and stifle 

growth. They are also a barrier in the 
path of a satisfactory resolution of the 
international debt problem. While recog- 
nizing the sometimes painful costs of ad- 
justing to changing trade patterns, the 
medium- and long-term costs of not ad- 
justing are far greater. We must work 
together to substitute "positive adjust- 
ment policies" for protectionism. 


The world economy has come through a 
painful process of disinflation and is now 
reaping the benefits of renewed growth. 
Our accomplishments are real. They are 
based on sound policies which we must 
continue. But they must now be supple- 
mented with increasing efforts in the 
structural area. The U.S. budget deficit 
must be reduced. All economies, but 
especially in Europe and the debtor 
LDCs, need to achieve better adaptation 
to change through realistic, market- 
oriented policies. All sources of short- 
run instability have not, and will prob- 
ably never, be removed. But if we can 
be as successful in improving the flex- 
ibility of our economies as we have been 
in reducing inflation, there is no reason 
why we cannot enjoy sustained growth 
in the medium term. ■ 

Secretary Visits Europe; 

Attends North Atlantic Council Meeting 

Secretary Shultz departed Washing- 
ton, D.C., December 10, 1984, to visit 
London (December 11-12), Brussels (De- 
cember 12-15) to attend the regular semi- 
annual session of the North Atlantic 
Council ministerial meeting and to con- 
fer with officials of the European Com- 
munities (EC), and Bonn (December 15). 
He returned to Washington on Decem- 
ber 15. 

Following are his arrival statement 
in Brussels, his news conference held at 
the conclusion of the North Atlantic 
Council meeting and the texts of the final 
communique and extracts from the 
minutes of that session, and the- joint 
nevis conference with John K. Block, U.S. 
Secretary of Agriculture; William E. 
Brock, U.S. Trade Representative; 
GcusUm Thorn, President of the EC Com- 
irn urn, Viscount Etienne Davignon and 
Wilhelm Haferkamp, Vice Presidents of 
the EC C'lrnmtssion; and P<ml Dalsager, 
a membet oj the EC CommiHifion. 



DEC. 12, 1984 1 

I look forward very much to the time I 
will be able to spend in Belgium starting 
with a meeting this noon with Prime 
Minister Martens and Foreign Minister 
Tindemans, where we'll review a com- 
plete range of issues of mutual interest. 

Belgium is a stalwart supporter of 
the Atlantic alliance, and I greatly value 
its leaders' views on the challenges 
which confront all the allies. Tomorrow 
I'll join my NATO colleagues and 
Secretary General Carrington for the 
semiannual ministerial meeting of the 
North Atlantic Council. 1984 has been a 
good year for the alliance, and our 
meeting tomorrow begins against a 
background of thorough agreement on 
all important aspects of East- West rela- 
tions. We have important tasks before 
us. We will review our security situation 

in light of the on-going Soviet military 
buildup. We will also explore ways to 
improve our dialogue on East- West 
issues, including arms control, with the 
Soviet Union and its allies. 

President Reagan has said he has no 
higher priority than to put our relations 
with the Soviet Union on a more con- 
structive basis and to make progress on 
arms control. I intend to consult closely 
with our NATO allies as we prepare for 
the January meeting in Geneva. While 
the Soviet Union's decision to enter into 
new arms control negotiations is 
welcome, the road ahead will not be 
easy, and Western patience and realism 
will remain the key to concrete progress 
in the coming months. 

I also look forward to my meetings 
with President Thorn and the EC Com- 
mission. My cabinet colleagues and I ex- 
pect to discuss the full range of trans- 
atlantic economic issues with the com- 
mission. I'm confident that these discus- 
sions will continue to play an invaluable 


Department of State Bulletin 


part in managing both the economic am 
the political aspects of our very close 
and very important ties. 



DEC. 14, 1984' 

Lord Carrington has just completed 
chairing a very successful ministerial 
meeting. It's been quite worthwhile from 
my standpoint, and I congratulate him 
on the job he had done and is doing. He 
has just summarized for you the 
meeting, and I gather you now have the 
communique, so I won't say anything 
further but just go on to your questions. 

Q. It's been said that you came 
here without putting forward any 
strategy for your talks in Geneva. 
Have you learned anything in the 
course of the last 2 days which has 
given you a strategy? 

A. Of course we have been develop- 
ing our thoughts about the Geneva 
meeting, and the President is engaged in 
a very extensive and painstaking effort 
as he approaches this with great 
seriousness of purpose. We've had quite 
a few meetings in Washington with the 
President on various aspects of the sub- 
ject, and he has been taking these mat- 
ters under consideration. I came here 
bringing the same set of matters for 
consideration and hear views here. I'll 
take these back to Washington; they'll 
be part of the input in the President's 
preparations for decisions that he'll 
make. I think that it's been a worthwhile 
process of consultation here, and it's an 
orderly and systematic and, I think, 
fruitful process that's going on in 

Q. Could you tell us whether any 
of the comments of the other Foreign 
Ministers struck you as being useful 
to incorporate in the U.S. position for 
Geneva, and if so, could you give us 
some indication what were the most 
interesting ideas you heard here from 
the others? 

A. I don't really want to get into the 
content, because this is the sort of thing 
we're considering, but there were a wide 
variety of suggestions made about the 
way of approaching the meeting. We 
were counseled to show patience, to go 
without illusions, not to expect things to 
happen very fast, but at the same time I 
think they were all glad to hear the 
positive and constructive way in which 
the President is approaching this. So 
there were certain tonal aspects that 
were helpful. 

1 think it is natural that NATO peo- 
ple would be particularly interested in 
the representation of the INF [inter- 
mediate-range nuclear force] issues in 
these discussions, and, of course, they 
will be very much a part of the discus- 
sions. There was a lot of discussion of 
tlu' fact that our East- West relation- 
ships, of course, do have arms control as 
an important — perhaps cen- 
tral — feature. But there's a lot more to 
it than that, and this was brought out 
very clearly, as was the fact that there 
are other fora for discussion of MBFR 
[mutual and balanced force reductions] 
issues, confidence-building issues, 
chemical warfare, and so forth, that are 
also of great importance with which we 
agree. So there were a wide variety of 
things that were brought up, and it was 
very helpful to me to hear those views. 
And, of course, this is one form of con- 

The Special Consultative Group 
meetings are another, a little more 
technical, form of consultation. There 
will be one of those meetings next week. 
We have had a visit from Chancellor 
Kohl in Washington just recently. Mrs. 
Thatcher will be visiting with the Presi- 
dent later this month. Prime Minister 
Nakasone will be visiting with us in 
early January, and so there is a very ex- 
tensive process of visitation on all this, 
and I'm sure it's worthwhile. 

Q. Why did you not set up at least 
in principle a new consultative 
mechanism, because there is such a 
multiplicity of mechanisms now that 
it's difficult to see which one will be 
chosen in the event of there being 
progress in Geneva? 

A. There are established ways of 
consulting. They have worked quite well, 
so we'll use them to the full, and we 
don't see any particular reason to alter 
things that are working well. As a folksy 
saying in the United States goes, "If it 
ain't broke, don't fix it." 

Q. Did you get the idea that there 
was disquiet in Europe about the 
Strategic Defense Initiative (SDI) and 
was this one of the subjects which 
was being put forward for discussion 
at the talks? 

A. There has been a great deal of 
discussion of that, of course, in Europe 
and in the United States. The President 
has sought— and Secretary Weinberger, 
I, and others have sought — to explain 
what this research program is about and 
what our intentions are. I think as this 
process has gone on, people have be- 

come perhaps more and more com- 
fortable with what these objectives are. 
1 don't say that without recognizing that 
there are some who question it, but it is, 
I think, a very positive potential con- 
tribution to the deterrent strategy that 
has sustained the alliance for all these 
years and maintained the peace. 

Q. On the basis of what you know 
from the deliberations so far in 
Washington on the Geneva meeting 
and what you've heard here, do you 
think it will be possible to devise a 
strategy for dealing with Moscow that 
will be satisfying both in the United 
States and to the allies? 

A. Yes. 

Q. Just a follow-up to your com- 
ments describing the Strategic 
Defense Initiative as a potential con- 
tribution. Did you mean to imply by 
your use of the word "potential" that 
it was potential technically speaking 
and that it might not be technically 
feasible or did you mean that it might 
be bargained away? 

A. No, it is a research program, and 
the technology that has come on stream 
in the last decade or so has given those 
who know a lot more about the 
technology than I do a lot of hope that 
there can be a credible and important 
strategic defense designed. But it is a 
research program at this point, and we'll 
have to see what the research unfolds to 

Q. The second part of the question 
as to its bargainability, if I can use 
that word. 

A. I don't know how you bargain 
about a research program, but you can 
certainly talk about it. At any rate, just 
how the discussions and negotiations 
about space-related matters will be 
handled is one of the things that we're 
discussing in detail with the President. 

Q. Assuming there is progress in 
your dialogue with the Soviet side, 
you do envisage a stage being reached 
when the British deterrent will be in- 
cluded in your negotiations? 

A. I think that's a matter of some 
distance. I remember the statement that 
Mrs. Thatcher made about a year or so 
ago, and I think that's a good place to 
leave the subject. President Mitterrand 
also made a similar statement about 
British and French systems. 

February 1985 



Q. In your general discussions on 
East-West relations, was there any 
assessment of the present Soviet 
leadership and any possible changes in 
the future? 

A. People, of course, speculate about 
developments in the Soviet Union, but 
basically we proceed on the basis that 
the Soviet Union obviously is a very im- 
portant country and it has coherence. 
We are going to sit down with the 
representatives of the Soviet Union and 
try to work out solutions to our prob- 
lems. They constitute their pattern of 
decisionmaking, and we constitute ours, 
and we hope the two can interact in a 
worthwhile way. 

Q. Did you get any sense from 
your bilaterals here that NATO allies 
would be willing to participate in, or 
at least support, a military strike 
against terrorists if one should be 

A. We discussed the subject of ter- 
rorism, and I think that people increas- 
ingly recognize the importance of the 
subject. You notice it is brought into the 
communique as has been the case in 
other meetings, such as the summit 
meeting. We, I think, recognize the im- 
portance of sharing information on 
techniques of dealing with it, sharing in- 
formation about terrorists, and con- 
templating together the best ways of 
dealing with it. As to the use of military 
forces, I'm not going to comment on 

Q. Is the U.S. Administration 
keeping under review the possibility 
of postponing the military tests in 
space during January and March? 

A. Whatever is scheduled presum- 
ably will go forward on schedule. And 
the schedule is set up on a technical 
basis and obviously ought to proceed. 

Q. Do you foresee the need for a 
new ministerial level of consultation 
immediately after your talks in 

A. After our talks in Geneva, 
whatever the outcome, we will take 
steps, of course, to see that our allies 
are informed about what happens in a 
direct way. We're working out a plan for 
consultation, and undoubtedly one im- 
portant part of that is to come to 
Brussels and talk to the ministerial 
group here. But I'm sure also we'll want 

to go to capitals and, as a general prop- 
osition, keep people informed and get 
their reactions and advice, and we hope 
that this will be an ongoing process. 

Q. What's your answer to the de- 
mand of [West German Foreign 
Minister] Genscher to get active par- 
ticipation, and not only consultation, 
on further arms limitation talks? 

A. I have the impression from my 
individual discussions with Mr. Genscher 
in Washington, and here in the meeting 
and what's expressed in the communique 
that he and the others are very well 
pleased with the pattern of consultation, 
the way in which these discussions have 
been conducted, and the way it's pro- 
jected. As far as I know, there isn't any 

Q. In your bilateral talks with the 
Spanish [Foreign] Minister, Mr. 
Moran, did you get the impression 
that the Spanish position is now com- 
ing closer to the alliance compared to 
1 or 2 years ago, and do you expect 
this position to be even closer in the 
next year before the referendum? 

A. The Spanish Government is in 
the process of considering how it will 
posture itself, and we've been taking the 
attitude of being patient about that and 
working with them. Of course what we 
think is in our interest — "our" meaning 
the NATO alliance generally — and theirs 
is for them to be full partners in NATO. 
And we hope that that comes to pass. 

Q. We've been told repeatedly this 
week that we shouldn't expect too 
much from your talks with Mr. 
Gromyko. What do you think one 
could realistically hope should come 
out of Geneva? 

A. I really don't want to speculate 
too much about it. We are going there, 
having worked through both substantive 
and procedural issues and prepared for a 
serious, positive, and constructive 
discussion. From all I can tell, the Soviet 
Union is similarly preparing itself. So 
we'll go there with that attitude, and 
we'll just have to see what happens. 
Maybe nothing will happen, and that'll 
be the end of it. Or maybe it will take 
longer or maybe there will be some 
definitive outcome, at least in terms of 
fora that are set up for explicit negotia- 
tions. By our agreement, that's the 
presumed objective. So we'll just have to 
see. The main thing is that we are going 
there with a positive and constructive 
attitude, and we do hope that something 
worthwhile will be accomplished. 

Q. If I understood what you said a 
few minutes ago, the tests will go for- 
ward in March of ASAT [antisatellite 
systems] and their connection as it is 
with SDI. Does this mean that your 
previous comments about discussing 
restraint with the Russians will not 
include questions of postponing tests? 

A. What they will include I haven't 
made any comment on. The question of 
tests and when they take place, absent 
some agreement to the contrary, is 
essentially a technical question. I don't 
know what the technical considerations 
may be that will affect the timing of the 
tests. I think in this case what you're 
talking about is antisatellite devices of 
one kind or another, not directly SDI- 
related matters. So it's essentially a 
technical question unless there is some 
political decision otherwise as a result of 

Q. In your earlier remarks, our 
Prime Minister Nakasone's visit to 
your capital was counted also in the 
process of setting out your position. 
Originally Japan had nothing to do 
with the INF negotiations. Does that 
mean that you have a new idea — of 
geographic or other new elements — in 
your position vis-a-vis the newly start- 
ing talks with the Soviet Union? 

A. Prime Minister Nakasone and his 
colleagues have always been interested 
in arms reduction talks. And the posi- 
tion the alliance has taken in the INF 
talks has always been a position in favor 
of global constraints— zero to begin with 
and then various positions as we worked 
through the bargaining process. A global 
approach is necessary, in part because 
there are many SS-20s deployed against 
Japan, China, Korea, and also because 
SS-20 missiles deployed against those 
countries are mobile missiles. They can 
easily be moved in a short space of time, 
and the deployments against Europe can 
be augmented. So if all you did was 
negotiate about a certain category of 
weapons, depending on where they were 
deployed, you would not be dealing com- 
prehensively with the problem. The fact 
that they are pointed at Japan certainly 
catches the attention of the Japanese, 
and we've had many discussions with 
Prime Minister Nakasone and his col- 
leagues about arms control. They're very 
interested in the subject and understand- 
ably so. So we're always interested in 
his views. 


Department of State Bulletin 


Q. There are numerous published 
reports that you and Mr. Weinberger 
don't see eye to eye on how to go 
about negotiating in Geneva. Were 

you able to tell your colleagues here 
that these reports were a lot of rub- 
bish, or if they were not a lot of rub- 
bish, were you able to tell them that 
you will eventually see eye to eye by 
January 7? 

A. By and large Secretary 
Weinberger and I share common views 
on defense matters and on matters of 
this kind. We disruss them in meetings 
l>\ ourselves and then in meetings with 
the President. It isn't that there is just 
dialogue between Secretary Weinberger 
and me. There are a number of people 
involved, ami we try t>> examine all 
aspeets of the issues. The President cer- 
tainly likes to be sure that any angle on 
something that can be mentioned, 
whether you support it or not or just 
want to call it to his attention, are put 
there. In the end. the President decides, 
but on the whole I think he has seen a 
basic consensus on most important 
issues. Hut anyway, it's for the Presi- 
dent in the end to decide and then we all 
support the decisions that he makes. So 
Secretary Weinberger and I have 
worked, really, quite well together in 
this area. I've seen the newspaper 
stories, but I'm just telling you what my 
observation is for whatever it's worth. 

Q. Do you regard the present 
Dutch and Belgian positions on INF as 
favorable for the coming talks with 
Mr. Gromyko? 

A. Yes, I think the discussions we've 
had here and the text of the communi- 
que all put us in the kind of position of 
strength and readiness for dialogue that 
is the essence of the NATO posture on 
East- West relations. It's a good posture; 
it has worked for us in the past, and I'm 
sure it will work for us in the future, 
and we'll stick with it. The Dutch and 
the Belgians, I'm sure, will be very much 
a part of the process. 

DEC. 14, 1984 s 

The North Atlantic Council met in ministerial 
session in Brussels on 13th and 14th 
December 1984. Ministers agreed as follows: 

1. The last few years have been difficult 
ones for Past-West relations. The difficulties 
have not been of our making In particular, 
the constant Soviet build-up of arms of all 
kinds requires us to maintain adequate forces 
to guarantee our collective security and to 
preserve the peace. The Alliance has con- 
tinued to show strength and political solidari- 
ty, which remain the basis for our security. 

2. Thi' principles of the "Washington 
Statement of Past- West Relations" of May 
19X4, which reaffirms our commitment to the 
llarmel Report, continue to guide the 
Alliance. Deterrence and defence, combined 
with arms control and disarmament, as well 
as constructive dialogue with the East, are 
for us integral parts of a coherent policy for 
stable peace. We remain ready to play our 
full part in a realistic effort to bring about an 
improved Past-West relationship and in- 
creased co-operation. Regular bilateral hij^h- 
level contacts can contrihute to these objec- 
tives. We call upon the Soviet Union and its 
allies to adopt a similarly positive approach 
towards genuine detente. 

3. We will maintain our close consulta- 
tions on all matters of common concern. As 
we approach what may he a new phase in the 
arms control process, consultations on arms 
control and disarmament remain of particular 

4. We welcome the forthcoming meeting 
of Secretary Shultz and Foreign Minister 
Gromyko to discuss new negotiations on the 
whole range of questions concerning intercon- 
tinental and intermediate-range nuclear 
weapons and arms in outer space. 

Nuclear weapons should he substantially 
reduced by negotiations between the United 
States and the Soviet Union leading to 
equitable, verifiable and balanced agreements 
in which all concerned can have confidence. 

!>. The Allies concerned are willing to 
reverse, halt or modify the longer range INF 
(LRINF) deployments — including the removal 
and dismantling of missiles already 
deployed — upon achievement of a balanced, 
equitable and verifiable agreement calling for 
such action. In the absence of a concrete 
negotiated result obviating the need for such 
deployment, the Allies concerned emphasised 
their determination to continue the deploy- 
ment of longer-range INP missiles as sched- 
uled. 1 

<>. The best approach to the problem of 
chemical weapons is the most radical: they 
should he eliminated world-wide. We remain 
deeply concerned about the use of such 
weapons. We call on the international com- 
munity to work for the objective of a 
verifiable, comprehensive and global ban on 
chemical weapons. We attach high priority to 
the efforts to achieve this objective at the 
Conference on Disarmament in Geneva. 

7. Confidence and security are com- 
plementary. In Stockholm (CPE), we seek 
agreement on militarily significant and con- 
crete confidence and security building 
measures to be applied in the whole of 
Purope thereby giving new effect and expres- 
sion to the existing duty of all participating 
states to refrain from the threat or use of 
force. In Vienna, the Allies participating in 
the MKPR negotiations are actively working 
towards a verifiable agreement involving 
reductions of conventional forces to parity at 
lower levels, thereby enhancing confidence 
and improving military stability in Purope. 

8. We remain firmly committed to the 
balanced development of the CSCE process. 
The experts' meeting on human rights which 
will take place in Ottawa in May 1985 will be 
one important step in this process. Pull im- 
plementation by all participating states of the 
political undertakings made in Helsinki and 
Madrid is essential. The tenth anniversary of 
the signing of the Pinal Act in August 1985 
should be commemorated by a meeting of the 
participating states at political level, on the 
assumption that the international climate 
would make this appropriate. The CSCE 
process could thereby receive a new impulse. 

9. It is unacceptable that the Soviet 
Union, in disregard of its obligation not to 
threaten or use force, continues to violate the 
independence, sovereignty and territorial in- 
tegrity of Afghanistan. 

Other issues also remain of deep concern 
to us. Recent events in Poland again demon- 
strate the need to achieve national recon- 

We, for our part, respect the sovereignty 
and independence of all states. We will re- 
main vigilant and will consult on events out- 
side the treaty area which might threaten our 
common security. 

10. The maintenance of a calm situation 
in and around Berlin remains an essential ele- 
ment in East- West relations. In this regard 
unimpeded traffic on all access routes is of 
fundamental importance. 

We support the efforts of the Pederal 
Republic of Germany to continue and develop 
dialogue and co-operation with the German 
Democratic Republic as a contribution to 
strengthening peace in Purope and to obtain 
further practical improvements to benefit the 
German people, particularly the Berliners. On 
the question of the division of Germany, we 
reaffirm our Washington statement of 31st 
May 1984. 

February 1985 



11. We seek to improve the quality of the 
peace. As a community of free nations shar- 
ing common values, we remain fully com- 
mitted to strengthening free institutions and 
to promoting stability, well-being and 
economic co-operation, in the spirit of Article 
2 of the North Atlantic Treaty. 

We remain determined to prevent and 
suppress terrorism, which seeks to undermine 
stability and destroy our democratic institu- 

12. The continued expansion of Soviet 
military potential remains a major Allied con- 
cern. We are, therefore, determined to main- 
tain a sufficient level of both conventional 
and nuclear forces to ensure the credibility of 
deterrence. Those Allies participating in the 
military structure of the Alliance will work in 
particular to strengthen their conventional 

The security we seek for ourselves is not 
security at the expense of the Soviet Union 
or anyone else. None of our weapons will 
ever be used except in response to attack. 
Our Alliance is designed to prevent war and 
to preserve peace in freedom. 

13. The Spring 1985 meeting of the 
Council in ministerial session will be held in 
Lisbon in June. 

DEC. 14, 1984 

In addition to the Communique the Foreign 
Ministers decided to publish the following ex- 
tracts from the minutes of their meeting of 
13th and 14th December 1984. 

Armaments Co-Operation 

Ministers examined the report by the Con- 
ference of National Armaments Directors 
(CNAD). Reaffirming the importance they at- 
tach to the transatlantic dialogue between the 
European nations and their North American 
allies, they agreed that the decision to use 
the CNAD structure as the primary forum 
for this dialogue further demonstrated the ef- 
fectiveness of NATO's consultative 
machinery. Ministers welcomed the deter- 
mined efforts being made by the CNAD to 
exploit emerging technologies in order to im- 
prove conventional defence, and they re- 
viewed CNAD follow-on to the 1982 Bonn 
summit and Luxembourg ministerial 
meetings in the areas of armaments planning, 
and technology sharing and transfer. 
Ministers also noted with satisfaction major 
CNAD project achievements, such as the 
signing of feasibility memoranda of 
understandings for a Short Range Anti- 
Radiation Missile (SRARM) by seven nations, 
and a Long Range Stand-Off Missile 

OM) by three nations. Ministers further 

more noted with interest the CNAD discus- 
sions on upgrading current inventory equip- 
ment as a valuable complementary effort to 
acquisition of new systems. 

Ministers stressed the need to make a 
special effort to facilitate the participation of 
countries with less developed industries in 
joint projects. 

Economic Co-Operation and 
Assistance Within the Alliance 

Ministers took note of the Secretary- 
General's personal report on "Economic Co- 
operation and Assistance Within the 
Alliance," reviewing the economic situation 
and prospects of the Alliance's three less 
prosperous members, paying special attention 
to their needs, calling upon all countries in a 
position to do so to provide more aid as a 
visual proof of Allied solidarity and to help 
these countries to overcome their most press- 
ing problems which are inhibiting their 
necessary economic and defence moderni- 


Referring to paragraph 1 1 of their December 
1984 communique, Ministers strongly reaf- 
firmed their condemnation of increasing acts 
of terrorism world-wide. They noted with 
grave concern that these acts threaten 
democratic and free institutions and the con- 
duct of normal international relations. 
Ministers again stressed the need for the 
most effective co-operation possible to pre- 
vent and suppress this scourge. 

Committee on the Challenges 
of Modern Society (CCMS) 

Ministers took notes of the Secretary- 
General's annual report on the work of the 
Committee on the Challenges of Modern 
Society and expressed satisfaction at the con- 
tinuance at its high level of activities. A 
study on the most efficient ways to restore 
contaminated land has been successfully 
achieved: another pilot study, on air pollution 
impact modelling, is nearly finished. Two new 
studies, one on health and medical aspects of 
disaster preparedness, and another on 
estuarine management (phase II) have been 
accepted by the committee. Two further 
seminars, both dealing with the environmen- 
tal impact of military land requirement, have 
been held. 

The Situation in 
the Mediterranean 

Ministers noted the report on the situation in 
the Mediterranean in view of the actual and 
potential impact on Alliance security of 
events in the area. They requested the coun- 
cil in permanent session to continue to con- 
sult on the question and to submit further 
reports at their future meetings. 


Referring to paragraph 9 of their Decem- 
ber 1984 Communique, Ministers reaffirmed 
that events outside the treaty area may af- 
fect their common interests as members of 
the Alliance. They will engage in timely con- 
sultations on such events, if it is established 
that their common interests are involved. 
Sufficient military capabilities must be 
assured in the treaty area to maintain an ade- 
quate defence posture. Allies who are in a 
position to do so will endeavour to support 
those sovereign nations who request 
assistance in countering threats to their 
security and independence. Those Allies in a 
position to facilitate the deployment of forces 
outside the treaty area may do so, on the 
basis of national decision. 

East-West Trade 

Recalling their statements in previous Com- 
muniques, Ministers reaffirmed that trade 
conducted on the basis of commercially sound 
terms and mutual advantage, that avoids 
preferential treatment of the Soviet Union, 
contributes to constructive East- West rela- 
tions. At the same time, bilateral economic 
relations with the Soviet Union and the coun- 
tries of Eastern Europe must remain consist- 
ent with broad Allied security concerns. 
These include avoiding dependence on the 
Soviet Union, or contributing to Soviet 
military capabilities. Thus, development of 
Western energy resources should be en- 
couraged. In order to avoid further use by 
the Soviet Union of some forms of trade to 
enhance its military strength, the Allies will 
remain vigilant in their continuing review of 
the security aspects of East- West economic 
relations. This work will assist Allied govern- 
ments in the conduct of their policies in this 



DEC. 14, 1984 5 

President Thorn. I don't need to in- 
troduce you to the gentlemen seated at 
this table. You can see their name 
plates, but I'd just like to say that I am 
happy to be here before you once again 
to greet the representatives of the U.S. 
Government who, for the fourth time in 
succession, have come here to talk with 
us about the various problems that we 
have as important trading partners; I 
mean us, the Community, and the 
United States of America. 

I'd like to stress that this is the third 
time that Secretary of State Shultz has, 
in person, headed the U.S. delegation, 
and this has made possible for us to take 
stock, as it were, to some extent, and in 


Department of State Bulletin 


doing this stocktaking exercise, we 
found that the successes we have met 
with in our contacts and discussions can 
be balanced with the various setbacks, of 
course, which take place, and that 
overall a number of dangers have been 
avoided because we have been able to 
work together through exchanges of 
views. We have been able to remain in 
constant contact. And now, more than 
ever, in the difficult and rapid times of 
today, we believe that such exchanges of 
views need to be pursued. 

I can give you the various headings 
of the subjects that were discussed and 
the essential substance that was dis- 
cussed. We spoke about enlargement. In 
this respect, for the benefit of our 
friends from the United States, we 
record that we intended to pursue the 
enlargement negotiations actively, with 
the hope of being able to conclude these 
negotiations very soon, both as regards 
to Spain and as regards to Portugal. We 
insisted on the significance that this had 
for all of us in political and economic 
terms. I mean the idea of bringing Spain 
and Portugal successfully into the 

The United States has stressed that 
their legitimate rights should also be 
respected. They stressed that they 
wanted all of this to take place in full 
observance of the rules of the GATT 
[General Agreement on Tariffs and 
Trade]. They wanted us to abide by 
these rules strictly. Of course, we con- 
firmed that we intended to do this. And 
we point out that on the one hand, there 
was the system, of course, of community 
preference and, on the other hand, once 
enlargement comes into play, will bring 
about some tariff reductions as regards 
to a number of industrial products. 

With regard to the countries that 
will be joining the Community, we also 
discussed a number of agricultural 
issues. You will not be surprised to hear 
this. We explained to the members of 
the U.S. Government what develop- 
ments have taken place in Europe, what 
changes have been made to the common 
agricultural policy in a number of sum- 
mits and ministerial meetings. The 
Secretary of Agriculture also explained 
to us what policy the American Govern- 
ment was thinking of in this area. He, of 
course, underscored a number of par- 
ticular anxieties felt by our American 
friends with regard to a number of prod- 
ucts. And, of course, in this context, we 
spoke of corn gluten feed. And, of 

course, we also referred to our problems 
with wine. There was discussion of but- 
ter. Each side referred to its concerns 
and insisted on the need to have these 
various concerns taken into account. 

We discussed the industrial sector as 
well. And in this area, we talked about 
export credits. We talked about high 
technology, and here we were satisfied 
with the work undertaken by the groups 
which we have set up. We asked them 
that they should be able to continue 
their work and to work still more con- 
cretely on problems that are of common 
interest. There is, of course, the problem 
of pipes and tubes. We did discuss this. 
Each side restated its position, explained 
it more fully. We did not today find any 
common ground for understanding or 
agreement. We shall continue our ef- 
forts in this field, and we shall keep you 
informed of how this is continued. This 
is all I have to say on that point. 

On multilateral trade negotiations, 
we are in a position to express our com- 
mon satisfaction with regard to the out- 
come of the 40th session of the contract- 
ing parties of the GATT. The two 
sides — the Community and the United 
States — are ready to pursue work in 
1985 in the hope that at last it will be 
possible to hope to have done enough 
preparatory work in order to be able to 
envisage the new multilateral negotia- 
tion round. 

That is what I wanted to say, then,- 
by way of an introduction. I would ask 
Secretary of State Shultz if he would 
like to make a few introductory com- 
ments before he responds to your ques- 

Secretary Shultz. I think your sum- 
mary was fine and I don't have anything 
to add to it. I would only like to say that 
now, having several of these meetings 
with you and your colleagues, and 
recognizing that the commission will 
change now pretty soon, that I would, 
like to express on behalf of all of us our 
appreciation for the contacts we have 
had with you and the discussions, the 
problems that we have worked out 
together. And, of course, you have left 
an inventory of problems for your suc- 
cessors but, probably, a smaller inven- 
tory than you found when you got here. 
At any rate, our best wishes to you and 
our appreciation for the good work that 
we have been able to do together. 

Q. May I ask both sides how you 
regard the warning that the EC might 
have to seek compensation over the 
differences on steel pipes and tubing? 

Ambassador Brock. We didn't 
spend any time discussing the compensa- 
tion per se; we were talking about the 
issue. Obviously, the United States felt 
that we had an agreement, and after 
failing to resolve some differences 
within that agreement over the last 10 
months, we had to take action to enforce 
it. Under those circumstances, we 
believe that we can defend that action 
with full success in the GATT. And, 
therefore, there is no justification for 
any such suggestion. 

Q. I'd like to ask a two-part ques- 
tion. One directed at Mr. Block and 
the other for Mr. Dalsager. In the last 
2 years, Mr. Block has said that he 
didn't want any U.S. -EC trade wars in 
agriculture. Does he feel that the U.S. 
farm bill, which will reduce domestic 
price support for cereals and en- 
courage more exports, will drive down 
the world price for cereals, and what 
impact does he feel that will have 
upon the protectionist policies of the 
common agricultural policy? And will 
it be more effective in reforming the 
common agricultural policy than the 
EEC has been so far? 

And for Mr. Dalsager, I would like 
to ask whether he feels the EC would 
be able to afford to compete with the 
United States on the world market in 
1985, in view of the fact that the Com- 
munity at present does not have a 
realistic budget? 

Vice President Davignon. I think 
the position is quite simple. We think 
that the decisions taken by the United 
States are not in accordance with the 
GATT rules. That's why we asked for 
the council to meet on Monday. And if 
the matter is not resolved in the council, 
then, of course, we reserve our rights, 
while still complying with the procedures 
of GATT. So there is simply a difference 
of appreciation about the problem and 
the entitlements of the two sides. In our 
opinion, it is not in line with that of our 
American colleagues. 

Secretary Block. Let me say that 
the policies that President Reagan will 
be promoting in the Congress regarding 
agricultural policy is not driven by the 
policies of the European Community. 
The policies are policies that we believe 
are appropriate for the United States. I 
think they're sound policies for anyone 
in the world, but really we think that 
they're the right policies for us in the 
United States. I say that because this 
kind of reform is necessary, because the 
current programs that we have are not 

February 1985 



working. We've really not been suc- 
cessful in cutting production. When we 
do, someone else takes our markets. We 
price ourselves out of the world market 
with supports that are too high. Our 
policies and programs generally have 
been inconsistent. 

And we believe that a market- 
oriented program will be in the best in- 
terests of the United States of America 
and, ultimately, in the best interests of 
the American farmer, and we can com- 
pete on world markets and with this 
kind of a program we will be in a posi- 
tion to do precisely that. It's driven from 
two directions. Number one, it's a sound 
policy. Number two, it will reduce the 
cost of farm programs to our taxpayers. 
Both of these are worthy objectives, and 
for that reason we will pursue the policy 
that we have been talking about here to- 
day, which is one that envisions, number 
one, ending all restrictions on produc- 
tion, number two, provide for no ab- 
solute price floor. There will be a 
harvest loan, but that won't be the floor. 
We're going to compete in the world 
market at world prices. 

And we're doing this for a series of 
commodities — all commodities, grains, 
dairy, sugar, tobacco, the whole list. The 
government is not going to be in the 
business of holding large stocks of grain. 
All they do is depress prices for Ameri- 
can farmers. We will hold a reasonable 
amount of grain for humanitarian 
reserves, but we're not going to be 
holding huge stocks. And we will have a 
strong trade title in this legislation to 
give American farmers assurance that 
the U.S. Government is going to work to 
open up markets for them. 

The U.S. Government is not going to 
tolerate unfair trade practices, and the 
U.S. Government is going to work to 
bring down trade barriers. I believe that 
this will be sound policy for the United 
States of America. Just exactly what the 
Community does in response, I don't 
know precisely. I do believe the Com- 
munity would like at least at some point 
in time to move to policies that would 
cost less for them too. 

Commissioner Dalsager. First of 
all, we have an agreement in GATT 
where we are working with a so-called 
fair share of the market, and the Com- 
munity intends to stick to that policy. 
We will not. push any out of the market. 

That's the first answer. The next answer 
is that, speaking about cereals, prices 
are on the way down. The market price 
has been down this year, and I don't 
know what the new commission will do 
in their price proposals, but I could im- 
agine if we follow the decision taken by 
31st March this year that the prices for 
wheat and for cereals have to be 
decreased in the new price proposals. 
And finally about the budget, there will 
be many good reasons for saying that 
we cannot do anything because we do 
not have a budget. We will have some 
money available in all circumstances but 
not enough. I don't think it's as much a 
problem for the commission as it will be 
for the member countries, where, one 
way or the other, they will have to find 
money until the budget situation is 
solved in the Community. 

Q. What Mr. Block was saying 
sounded rather like the sort of 
declaration of trade war we will be 
writing about for some time. To what 
extent does he think that this is tak- 
ing an offensive which will involve 
Europe, and to what extent does Mr. 
Dalsager think that the EC can or 
should retaliate? 

Secretary Block. First of all, I don't 
believe that it has anything to do with a 
trade war. It has to do with competition 
in the world market. The United States 
does not and has never believed in 
agriculture dividing up the world market 
with some kind of market shares. We 
believe in competing. We believe that a 
country that has the production capacity 
to raise a product at a competitive price, 
that the law of comparative advantage 
should rule. And we just want to get in 
the business of producing and com- 
peting. And as I said in the beginning, 
our past support programs have really 
not served the American farmer well 
and our country well. And let's just face 
up to it, let's look to the future with 
bold, new, aggressive policies that will 
serve the United States and, indeed, I 
think will serve the world. 

Commissioner Dalsager. If the U.S. 
policies are in conformity with the com- 
mon rules we have about world trade, 
there will be no retaliation. And I am 
not sticking to guns because journalists 
wish to have a declaration of war, 
because I don't think we should speak in 
that direction. What we have to do is to 
negotiate problems if there are problems 
and if there will be problems. That is the 
intention of the Community and the 

Q. Did you discuss Central 
America, and did the United States in 
some way accuse Europe of ag- 
gravating the problems in the area by 
its own farm export policies? Did the 
Europeans take seriously this kind of 

Secretary Shultz. The subject of 
Central America wasn't discussed in our 

Q. If you say we want to produce 
and compete on the world market, 
does that mean that you will do that 
regardless of the commercial interests 
of your Western allies? 

Secretary Block. I really don't even 
know what you are suggesting. What I 
am saying is that we'll just produce and 
sell. We're not going to subsidize the 
production. We're not going to subsidize 
the exports with any kind of restitu- 
tions. That's perfectly within the law of 
GATT and everything else to produce a 
product at a competitive price and offer 
it on the world market. It's being of- 
fered for sale by private farmers or 
traders. It's not the government selling. 
There's really nothing to it. We're just in 
business and no subsidies. The govern- 
ment is going to bring down the cost of 
farm programs and go out and farmers 
will just produce and sell competitively. 
It's nothing revolutionary. It's good 
sound economic trade policy. 

Q. You accepted the introduction 
of President Thorn, and he said that 
the United States insisted that the 
Community should also stick to the 
GATT rules. I wonder how you can 
say that if some of your legislation, 
like Wine Equity Act— and I wonder 
whether it was discussed 
here — seems, at least to the opinion of 
the European Commission and Euro- 
pean governments, a gross contradic- 
tion to the GATT rules? 

Secretary Shultz. Of course, people 
take challenges to the GATT and it gets 
worked out there. And the Europeans 
feel they operate within that framework 
and so do we. Perhaps Ambassador 
Brock would like to add to that. 

Ambassador Brock. I think the 
original Wine Equity Act clearly was in 
violation of the GATT rules. This Ad- 
ministration actively opposed it, as it did 
a number of other GATT-inconsistent 
and protectionist proposals. We were 
successful in striking virtually all from 
the trade act. And I think it is fair to 
say that the community today expressed 


Department of State Bulletin 


some appreciation for those actions. I 
don't think the issue is relevant to the 
present situation. I think we have solved 
some problems that Congress proposed, 
but we did not allow that to he passed. I 
think we are in pretty good shape with 
regard to the GATT. 

Vice President Haferkamp. On the 
speeit'ie point which was raised about 
wine, as it was dealt with within GATT, 
we noted together in our discussion of a 
few moments ago just how important 
this international institution is for world 
trade. We said that we would continue 
to work together to strengthen this in- 
stitution and further develop it. Bearing 
in mind what has been said recently 
about a new GATT round, in the last 
few weeks we have made some head- 
way. And I think it is possible to say 
now that there is sufficient substance to 
prepare for a round which would then 
probably take place in 1986 at a 
ministerial level. Now if that is the case, 

th sides agree that GATT needs to 
be pushed forward and strengthened, 
then I think it's self-evident that both 
sides accept the rules and procedures of 
GATT, and whenever there are disputes, 
those disputes will be resolved within 
the context of the GATT procedures and 

Q. It has nothing to do with 
today's meeting, but, to Mr. Shultz, 
about the meeting that happened be- 
tween President Reagan and South 
African Nobel Prize laureate Desmond 
Tutu: Does that mean a new approach 
of the United States toward South 
Africa and Namibia? Second part, will 
there be a new deal from the Reagan 
Administration in the Middle East 
after the new moves? 

Secretary Shultz. The President 
had a very good meeting with Bishop 
Tutu, and the President explained our 
policy carefully and, I think, effectively. 

Our policy is, first of all, as far as 
South Africa is concerned, in the 
framework of constructive engagement 
to oppose absolutely and without any 
equivocation — this has always been the 
case — the system of apartheid. We have 
no use for it. It is wrong morally, and I 
am sure that stability and peace will 
never really come to that part of the 
world until the system has disappeared. 

U.S. Reaction to Agreement 
on Cypriot Discussions 

DEC. 13, 1984 1 

The United States welcomes the an- 
nouncement late yesterday by UN 
Secretary General Perez de Cuellar that 
the two Cypriot communities have 
agreed to participate in a summit 
meeting in January. We view this as a 
most positive development, one creating 
a new opportunity to end the division of 
Cyprus and establish a reunited Cypriot 

This agreement to hold direct, high 
level talks, the first in over 5 years, 
came about only because of concerted ef- 
forts by all of the parties concerned. 
Cypriot President Spyros Kyprianou and 
Turkish Cypriot leader Rauf Denktash 
have shown statesmanship and courage. 
The Governments of Turkey and Greece, 
which have important traditional roles to 
play, took an active interest in the three 

rounds of proximity talks and deserve 
credit for helping to bring about this 
favorable outcome. Secretary General 
Perez de Cuellar deserves our con- 
gratulations and appreciation for this ac- 
complishment and shall continue to have 
our full support as he works toward a 
fair and final settlement of the Cyprus 

In deciding to proceed to a summit, 
the leaders of the two Cypriot com- 
munities have undertaken a historic but 
difficult task. Finding solutions to con- 
crete problems which have divided the 
two communities will require skill, pa- 
tience, and vision. As the President an- 
nounced in May, we are prepared to 
assist the Cypriots in rebuilding a united 
country when a settlement, or major 
progress in that direction, is achieved. 

: Read to news correspondents by acting 
Department spokesman Alan Romberg. ■ 

That doesn't mean that we shouldn't 
engage with South Africa and in 
southern Africa to help in whatever way 
we can to resolve problems. We have 
done so, and there has been a certain 
line of results that could be identified. I 
won't go into it all, but, at any rate, the 
President explained our policy and reaf- 
firmed the fact that he intends to con- 
tinue following that policy. 

I might say that after the 
President's meeting, there was a lengthy 
meeting with Vice President Bush and 
Assistant Secretary [of State for African 
Affairs Chester A.] Crocker, and we had 
a full review. Of course, also, we had a 
very interesting discussion in listening to 
suggestions that Bishop Tutu wished to 

As far as the Middle East is con- 
cerned Assistant Secretary [of State for 
Near Eastern and South Asian Affairs 
Richard W.] Murphy is there and is 
visting around in the area. And if we 
can make a contribution toward stability 
and peace there, we certainly intend to, 
and I don't have anything further to say 
on it. 

J Press release 261 of Dec. 17, 1984. 

2 Press release 263 of Dec. 20. 

3 The Minister of Foreign Affairs of Spain 
reserves his Government's position on the 
present Communique [text in original]. 

■•Denmark and Greece reserve their posi- 
tions on Paragraph 5 [text in original]. 

5 Press release 262 of Dec. 17. ■ 

February 1985 



U.S. and West Germany's 
Commitment to Peace 

Following is the joint statement 
issued at the conclusion of a meeting be- 
tween President Reagan and Chancellor 
Helmut Kohl on November 30, 198Jf. The 
text was not available to include with 
other documentation on the Chancellor's 
visit to Washington, D.C., published in 
the January 1985 Bulletin. 1 

NOV. 30, 1984 

The President of the United States and 
the Chancellor of the Federal Republic 
of Germany met today, at the 
President's invitation, to continue their 
regular exchanges on matters of com- 
mon interest. Secretary Shultz, Secre- 
tary Weinberger, and Foreign Minister 
Genscher took part in the talks. 

The President and the Chancellor 
stressed the extraordinary importance of 
establishing a more lasting basis for 
peace in Europe and throughout the 
world. Noting the role of NATO in pro- 
viding peace and security for Europe 
and North America in the more than 35 
years since its founding, the President 
and the Chancellor are reassured by the 
clear determination which NATO has 
shown to safeguard its security and 
assert its unity. 

President Reagan and Chancellor 
Kohl emphasized that the close relation- 
ship between the United States and the 
Federal Republic of Germany is fun- 
damental to the maintenance of peace 
and that continuing cooperation is essen- 
tial to maintaining the common defense. 

As democracies active in the Con- 
ference on Security and Cooperation in 
Europe (CSCE) process, our cooperation 
can be especially successful in 
demonstrating the human as well as 
political aspects of the search for peace. 
Committed to the Helsinki Final Act, 
and to the other pertinent multilateral 
and bilateral documents, we do not ac- 
cepi the division of Europe as perma- 
nent and shall work to lower the human 
costs of the tragic barrier which divides 
continent, and in particular, the Ger- 
man people. 

The President and the Chancellor 
reaffirm the importance of continuing a 
balanced approach to East-West rela- 
tions, as set out in the Harmel report, 

ensuring the maintenance of necessary 
military strength and transatlantic 
political solidarity while pursuing a pro- 
ductive relationship between the coun- 
tries of East and West through dialogue, 
cooperation, and negotiation. 

Such dialogue must be built on the 
recognition of mutual, legitimate securi- 
ty interests and be conducted on the 
basis of equal rights for all parties in- 
volved. Stable relations must be 
characterized by the renunciation of 
military force levels beyond legitimate 
defense needs and must be founded on 
strict observance of the ban on the 
threat or use of force, as enshrined in 
the UN Charter. 

The Chancellor endorses the Presi- 
dent's continued readiness to meet with 
the Soviet General Secretary at a 
carefully prepared meeting. The 
Chancellor also supports the U.S. pro- 
posal to hold regular, high-level talks 
and meetings which would demonstrate 
the will of both sides to cooperate on 
questions of peace, security, and interna- 
tional stability. The President welcomes 
the continuing efforts of the Federal 
Republic of Germany to pursue dialogue 
and cooperation with the Soviet Union 
and with all the countries of central and 
Eastern Europe. They urge the Soviet 
Union to join in a heightened effort to 
improve East- West relations, give fresh 
impetus to arms control, and fashion a 
constructive and stable relationship at 
the lowest possible level of armament. 

The President and the Chancellor 
stressed that the alliance's existing 
strategy of forward defense and flexible 
response has, for many years, played an 
indispensable role in preserving peace in 
Europe and will continue to do so. The 
goal of this defensive strategy is and 
will remain to prevent any war. The 
President and the Chancellor reaffirmed 
the principle subscribed to by all NATO 
members that none of their weapons will 
ever be used, except in response to at- 

They are agreed that all requisite 
steps must be taken to maintain the ef- 
fectiveness of the alliance's military 
strategy and ensure continued deter- 
rence. The expansion and modernization 
of Soviet and Warsaw Pact nuclear and 
conventional forces has intensified the 
need to strengthen the alliance's force 

The United States and the Federal 
Republic of Germany regret that in con- 
trast to NATO's agreed reductions, 
starting in 1980, of 2,400 nuclear 
warheads, the Soviet Union has con- 
tinued to build up its nuclear forces, 
while abandoning the bilateral Geneva 
arms control negotiations. The United 
States and the Federal Republic of Ger- 
many see it as imperative, both for even- 
tual success in arms control negotiations 
and for the alliance's security, that, in 
the absence of concrete results in the 
negotiations, NATO deployments pro- 
ceed as envisaged under the 1979 deci- 
sion. NATO has stated that it remains 
ready to halt, modify, or reverse 
deployments — including the removal and 
dismantling of missiles already deployed 
in Europe — in accordance with the 
terms of a balanced and verifiable agree- 

The President and the Chancellor 
consider it essential to redress the 
steadily growing conventional force im- 
balance favoring the Warsaw Pact. 
Therefore, an improved conventional 
defense posture would help ensure that 
the alliance's capacity to act is fully 
preserved, that deterrence is strength- 
ened, and that the nuclear threshold is 
raised. The President and the 
Chancellor, therefore, agreed on the 
need for a coherent alliance approach to 
enhancing NATO's conventional 
capabilities and are prepared to par- 
ticipate in alliance efforts to make the 
necessary resources available. 

The President and the Chancellor 
emphasized the importance of maintain- 
ing an equitable balance of effort and 
sacrifice among alliance members. The 
Chancellor expressed his appreciation 
for the crucial contribution that the 
United States makes to alliance security, 
in particular through the presence of 
American troops in Europe. The Presi- 
dent expressed his appreciation for the 
German contribution to the common 
defense. In particular, he welcomed the 
Federal Government's recent decision 
toward sustaining the Bundeswehr's 
force structure. He also welcomed the 
recent initiatives of the Western Euro- 
pean Union and the intensifying dialogue 
between the Independent European Pro- 
gram Group and their North American 
partners in identifying promising areas 
for resource cooperation. They also 
stressed the importance of making bet- 
ter use of available resources and 
technology through broader economic 
and arms cooperation among member 


Department of State Bulletin 


Underscoring the basic policy of the 
North Atlantic alliance, the President 
and the Chancellor reaffirm that deter- 
rence and defense together with arms 
control and disarmament are integral 
parts of their security policy. They form 
necessary elements of a coherent 
strategy for securing a stable peace. 

The President and the Chancellor 
reaffirm their commitment to achieve 
significant results in multilateral arms 
control negotiations, including mutual 
and balanced force reductions (MBFR), 
the Conference on Security- and 
Confidence-Building Measures and 
Disarmanent in Europe (CDE), and the 
Conference on Disarmament (CD). 

They stress the need for progress 
toward an MBFR agreement establish- 
ing parity in central Europe and improv- 
ing military stability. At the Stockholm 
conference, they seek agreement on 
militarily significant confidence-and 
security-building measures (CSBMs) to 
be applied in the whole of Europe, thus 
allowing participants to reaffirm and 
make concrete the existing commitment 
to refrain from the threat or use of 

They express their determination to 
work for progress on a verifiable, com- 
prehensive, global ban on chemical 
weapons at Geneva. 

The Chancellor takes special note of 
the President's readiness to discuss with 
the Soviet Union the full range of issues 
of concern to both sides: the reduction 
of intercontinental and intermediate 
range nuclear systems, the relationship 
between defensive and offensive forces, 
outer space arms control, improving the 
effectiveness of existing arms control ar- 
rangements, and agreeing to further 
measures to reduce the risks of conflict 
through accident, misunderstanding, or 

The President reiterates, and the 
Chancellor fully supports, the United 
States' continuing readiness to work 
with the Soviet Union in developing a 
conceptual framework for future 
negotiations leading to balanced and 
verifiable arms control agreements. The 
President and the Chancellor express 
their conviction that prompt and mean- 
ingful progress is possible. They stress 
the significance of the understanding 
reached between the United States and 
the Soviet Union to open a new phase of 
their arms control dialogue with the 
meeting between Secretary of State 
George Shultz and Foreign Minister 
Andrei Gromyko in Geneva. 

The President and the Chancellor 

reaffirm the value and necessity of con- 
tinued close and intensive consultations 
within the alliance over the range of 
issues before it. In particular, the Presi- 
dent and the Chancellor stress the im- 
portance of close consultations among 
the allies on arms control matters and 
reiterate their resolve to continue to 
contribute actively to this process of 

The President and the Chancellor 
pay tribute to the North Atlantic- 
alliance as the community of democratic 
states to which its members owe the 

preservation of peace and freedom. The 
President appreciates the vital contribu- 
tion each ally makes to NATO defense 
and deterrence and reaffirms the U.S. 
commitment to the common goal of 
maintaining peace and security in 
Europe. The President and the 
Chancellor are determined to strengthen 
further their efforts in the search for a 
stable and lasting peace in Europe and 
throughout the world. 

'Text from Weekly Compilation of 
Presidential Documents of Dec. 3, 1984. 

Rededication to the 
Cause of Human Rights 

by President Reagan 

Remarks made in a ceremony com- 
memorating Bill of Rights Day, Human 
Rights Day, and Human Rights Week, 
198U, and text of the -proclamation on 
December 10, 198^ 

This ceremony marks more than another 
event on the White House calendar or 
another worthy cause for the national 
agenda; for in observing Human Rights 
Day, we rededicate ourselves to the 
cause of human dignity and freedom, a 
cause that goes to the heart of our na- 
tional character and defines our national 

So today, we dare to affirm again 
the commitment of the American people 
to the inalienable rights of all human 
beings. In reaffirming the moral beliefs 
that began our nation, we strive to make 
the United States what, we pray to God, 
it will always be— a beacon of hope to all 
the persecuted and oppressed of the 
world. And we resolve that, as a people, 
we'll never rest until the blessings of 
liberty and self-government are ex- 
tended to all the nations of the Earth. 

Two years ago in London, when I 
called for a crusade for freedom and 
human rights, I noted that these 
ideals— embodied in the rule of law, 
under God, and in the institutions of 
democratic self-government— were on 
the march. Because these ideals repre- 
sent the oldest and noblest aspirations of 
the human spirit, I said then that this 
power is irresistible when compared to 
totalitarian ideologies that seek to roll 
back mankind's march to freedom. 

Today, I want to take special note of 
evidence that this desire for self- 
determination, this recognition by the 
state of the inalienable rights of men 
and women everywhere, is nowhere 
stronger than close to our own borders 
in the lands of Latin America. In con- 
trast to only a few years ago, today 
more than 90% of the people in Latin 
America and the Caribbean live in na- 
tions either democratically governed or 
moving in that direction. 

While we're still doing all that we 
can to promote democratic change in na- 
tions such as Paraguay and Chile, we 
must not forget that over the last 5 
years in Argentina, Bolivia, Ecuador, El 
Salvador, Honduras, Panama, Peru, 
and, most recently, in Uruguay, military 
juntas have been replaced by elected 
civilian governments. And just last Mon- 
day, democratic values triumphed again 
as the people of Grenada freely elected a 
new civilian prime minister. 

Today, all who cherish human rights 
and individual freedom salute the people 
of the Americas for their great achieve- 
ments. Arid we pledge to our neighbors 
the continued support and assistance of 
the United States as they transform our 
entire hemisphere into a haven for 
democracy, peace, and human rights. 

In other nations farther from our 
shores, we've also seen progress toward 
reducing the repression of human rights 
and some strengthening of democratic 
institutions. In some of these nations, 
which have authoritarian governments 
but friendly ties to the United States 
and the community of democratic na- 
tions, quiet diplomacy has brought about 
humane and democratic change. 

February 1985 



But we know there are occasions 
when quiet diplomacy is not enough, 
when we must remind the leaders of na- 
tions who are friendly to the United 
States that such friendship also carries 
responsibilities for them and for us. And 
that's why the United States calls for all 
governments to advance the democratic 
process and work toward a system of 
government based on the consent of the 

From our beginning, regard for 
human rights and the steady expansion 
of human freedom have defined the 
American experience. And they remain 
today the real, moral core of our foreign 
policy. The United States has said on 
many occasions that we view racism 
with repugnance. We feel a moral 
responsibility to speak out on this mat- 
ter, to emphasize our concerns and our 
grief over the human and spiritual cost 
of apartheid in South Africa, to call 
upon the Government of South Africa to 
reach out to its black majority by ending 
the forced removal of blacks from their 
communities and the detention, without 
trial, and lengthy imprisonment of black 
leaders. Such action can comfort only 
those whose vision of South Africa's 
future is one of polarization, violence, 
and the final extinction of any hope for 
peaceful, democratic government. At the 
same time, we note with satisfaction 
that the South African Government has 
released 11 black leaders, including the 
top leaders of two of that country's most 
important labor unions. 

Because we care deeply about the 
people of South Africa and the future of 
that nation, we ask that the constructive 
changes of recent years be broadened to 
address the aspirations of all South 
Africans. Peaceful change in South 
Africa, and throughout southern Africa, 
can come only when blacks and whites 
find a durable basis to live together, 
when they establish an effective 
dialogue, a dialogue sustained by 
adherence to democratic values and a 
belief in governments based on the con- 
sent of the governed. We urge both the 
Government and the people of South 
Africa to move toward a more just socie- 
ty. We pledge here today that if South 
Africans address the imperatives of con- 
structive change, they will have the 
unswerving support of our government 
and people in this effort. 

A few years ago, when I spoke of 
totalitarian ideologies as the greatest 

at to persona] freedom in the world 
today and the most, persistent source of 
human suffering in our century, I also 

Bill of Rights Day, 
Human Rights Day and Week, 1984 

DEC. 10, 1984 

On December 15, 1791, our Founding 
Fathers celebrated the ratification of the first 
ten amendments to the Constitution of the 
United States— a Bill of Rights that has 
helped guarantee the freedoms that all 
Americans cherish. 

For the first time in the history of na- 
tions, our Founding Fathers established a 
written Constitution with enumerated rights 
based on the principle that the rights to life 
and liberty come not from the prerogative of 
government, but inhere in each person as a 
fundamental human heritage. Americans 
believe that all persons are equal in their 
possession of these unalienable rights and are 
entitled to respect because of the immense 
dignity and value of each human being. With 
these great principles in mind, the Founding 
Fathers designed a system of government 
limited in its powers, based upon just laws, 
and resting upon the consent of the gov- 

When Americans first proclaimed this 
noble experiment in self-government and 
human liberty, it seemed to some to be a Uto- 
pian, unrealistic ideal. Today, virtually every 
nation in the world has adopted a written 
constitution expressing in varying degrees 
fundamental human rights. One hundred and 
fifty-seven years after the ratification of our 
Bill of Rights, on December 10, 1948, the 
United Nations adopted the Universal 
Declaration of Human Rights affirming an in- 
ternational consensus on behalf of the human 
rights and individual liberties that we value 
so highly. 

Thirty-six years after the adoption of the 
Universal Declaration of Human Rights, 
however, it is clear that this consensus is 
often recognized more on paper than in prac- 
tice. Throughout the world, many govern- 
ments nominally adhere to the Universal 
Declaration of Human Rights while suppress- 
ing free elections, independent trade unions, 
due process of law, and freedom of religion 
and of the press. 

The United States recognizes a special 
responsibility to advance the claims of the op- 
pressed; to reaffirm the rights to life and 
liberty as fundamental rights upon which all 
others are based; and to safeguard the rights 
to freedom of thought, conscience, and 
religion. As we are free, we must speak up 
for those who are not. 

As Americans, we strongly object, to and 
seek to end such affronts to the human con- 
science as the incarceration in the Soviet 
Union of men and women who try to speak 
out freely or who seek to exercise the basic 
right to emigrate; the harsh treatment ac- 
corded one of the great humanitarians of our 
time, Andrei Sakharov; the denial of basic- 
human rights and self-determination in 
Eastern Europe and the Baltic states; the 
failure of the Polish authorities to establish 
an effective dialogue with the free trade 
union movement in that country; the mani- 
fest injustices of the apartheid system of 
racial discrimination in South Africa; the 
persecution of the Baha'i religious minority in 
Iran; the lack of progress toward democratic 
government in Chile and Paraguay; the cam- 
paign against the Roman Catholic Church in 
Nicaragua; the suppression of freedom in 
Cuba and Vietnam; the brutal war waged by 
Soviet troops against the people of Afghani- 
stan; and the continuing Vietnamese occupa- 
tion of Kampuchea. 

The American people recognize that it is 
the denial of human rights, not their ad- 
vocacy, that is a source of world tension. We 
recall the sacrifices that generations of 
Americans have made to preserve and pro- 
tect liberty around the world. In this century 
alone, tens of thousands of Americans have 
laid down their lives on distant battlefields to 
uphold the cause of human rights. We honor 
and cherish them all. Today, it is with an 
abiding sense of gratitude and reverence that 
we remember the great gift of freedom that 
they bequeathed to us. 

As we give special thought to the bless- 
ings that we enjoy as a free people, let us not 
forget the victims of human rights abuses 
around the world. 

Now, Therefore, I, Ronald Reagan, 
President of the United States of America, 
do hereby proclaim December 10, 1984, as 
Human Rights Day and December 15, 1984, 
as Bill of Rights Day, and call on all 
Americans to observe the week beginning 
December 10, 1984, as Human Rights Week. 

In Witness Whereof, I have hereunto 
set my hand this tenth day of December, in 
the year of our Lord nineteen hundred and 
eighty-four, and of the Independence of the 
United States of America the two hundred 
and ninth. 

Ronald Reagan 


Department of State Bulletin 


pointed out that the United States, too, 
lias faced evils like racism, anti- 
Semitism, ami other forms of in- 
tolerance ami disregard for human 
freedom. So while we work to see 
human rights extended throughout the 
world, this observance o\' Human Rights 
Day reminds us of our responsibility to 
assure against injustice and intolerance 
in our own land as well. And today, 1 
call on the American people to reaffirm, 
in our daily lives and in the workings of 
our private and governmental institu- 
tions, a commitment to brotherhood and 
equal justice under the law. 

But we do a serious disservice to the 
cause of human rights if we forget that, 
however mistaken and wrong, however 
stumbling the actions of democracies in 
seeking to achieve the ideals of freedom 
and brotherhood, our philosophy of 
government permits us to acknowledge, 
debate, and then correct mistakes, in- 
justices, and violations of human rights. 
Let us always remember the critical 
moral distinction of our time— the clear 
difference between a philosophy of 
government that acknowledges wrong- 
doing and injustice and one that refuses 
to admit to such injustices and even 
justifies its own assaults on individual 
liberty in the name of a chimeric, Uto- 
pian vision. Such brutal affronts to the 
human conscience as the systematic sup- 
pression of individual liberty in the 
Soviet Union and the denial of religious 
expression by Christians, Jews, and 
Muslims in that country are tragic ex- 

Today, for example, the largest re- 
maining Jewish community in Europe, 
Soviet Jewry, is again being exposed to 
a systematic anti-Semitic campaign. 
Ominously, teachers of the Hebrew 
language have been arrested and their 
efforts to preserve their culture and 
religion treated as a crime. 

Soviet authorities are continuing to 
threaten many "refuseniks" with confine- 
ment in psychiatric hospitals, expulsion 
from their jobs, and internal exile. Yet 
thousands of Soviet Jews have applied 
for permission to emigrate. We have in- 
sisted and shall continue to insist that 
those who wish to leave must be allowed 
to do so. 

Our heart also goes out today to an 
individual who has worked so hard for 
human rights progress in the Soviet 
Union and suffered so much for his ef- 
forts—the Nobel Prize laureate, Dr. 
Andrei Sakharov. Nothing more clearly 
illustrates the absence of what our 
Founding Fathers called a "decent 
Respect to the Opinions of Mankind" 

U.S. Repeats Request That 
Americans Leave Libya 

DEC. 13, 1984 1 

In December 1981, President Reagan ex- 
pressed his concern for the safety of 
Americans in Libya and called for their 
voluntary departure. Consequently use 
of American passports was proscribed 
for travel to, in, or through Libya unless 
specifically validated by the Department 
of State. Such validation is granted only 
in extraordinary circumstances. These 
travel restrictions remain in effect under 
renewal announced on November 30, 

In response to the President's 
December 1981 request, thousands of 
Americans voluntarily departed from 
Libya. The individuals and companies af- 
fected by the President's request were 
very cooperative, and the number of 
Americans there dropped significantly. 
Only a few hundred remained, a large 
number of whom were spouses of 

Unfortunately the number of 
Americans in Libya has again risen, ap- 
parently in part as a result of business 
opportunities and the willingness of the 
Libyan authorities to cooperate in allow- 
ing U.S. citizens to subvert the intent of 
U.S. policy by entering Libya without 
using their passports. 

Col. Qadhafi's readiness to use ter- 
rorism in support of his policies and to 
sponsor the use of terrorism by others 
has been tragically demonstrated in 
repeated incidents in recent months. 
Furthermore Libyan hostility toward the 
United States has not diminished. There 
is a potential danger to Americans who 
reside in, visit, or transit Libya. 

There is no direct American 
diplomatic representation in Libya. 
Belgium is the protecting power of the 
U.S. interests in Libya and can only pro- 
vide minimum consular services or 
assistance to Americans. Therefore, the 
U.S. Government cannot assist 
Americans who may be endangered by 
hostile actions of the Libyan Govern- 

Against this background, all 
Americans should honor existing travel 
restrictions, which were initiated to help 
ensure their safety. In addition, we 
again call upon American firms to honor 
the President's request and to withdraw 
any American citizen employees who 
might remain in Libya. 

'Read to news correspondents by acting 
Department -spokesman Alan Romberg. ■ 

than the cruel treatment of this great 
humanitarian. The Soviet Union, itself, 
would do much to regain respect within 
the international community if it would 
allow academician Sakharov and his 
wife, Yelena Bonner, to live the rest of 
their lives in dignity in a place of their 
own choosing. We're pleased to have the 
Sakharovs' son-in-law here with us 

The Sakharovs are the best known 
victims of human rights violations in the 
Soviet Union, but thousands of other 
Soviet citizens, such as Uri Orlov, or 
Anatoli Shcharanskiy— whose wife, 
Avital, is here with us today— suffer in 
Soviet prisons and labor camps for the 
sole crimes of expressing a personal 
opinion, seeking to emigrate, or openly 
expressing their love of God. 

We Americans recognize a special 
responsibility to speak for the op- 
pressed, wherever they may be. We 
think here of special cases like the 

persecution of the Baha'i religious 
minority in Iran. But we also 
acknowledge a special obligation to 
speak for those who suffer the repres- 
sion of totalitarian regimes, regimes 
that refuse to acknowledge and correct 
injustice and that justify absolute state 
power even as they seek to extend their 
cruel rule to other lands. 

So, we call today for all free peoples 
of the world to unite in resisting and 
bringing to an end such intolerable prac- 
tices as the suppression of free trade 
unionism, the campaign against the 
church and against political freedom in 
Nicaragua, the continuing Vietnamese 
occupation of Cambodia, and the bar- 
baric war waged by Soviet troops in 
Afghanistan— a war which began 5 years 
ago this month with the Soviet invasion 
of that once nonaligned country. 

February 1985 



As but one of the tragic conse- 
quences of Soviet actions in Afghan- 
istan, more than one-third of the people 
of that country have fled from their 
homes and sought refuge in internal or 
external exile. 

Finally, we welcome the recent steps 
taken by the Polish Government, but we 
urge that they are followed by lasting 
efforts for genuine, national reconcilia- 
tion through effective dialogue with the 
Polish people. 

So today, we, the people of the 
United States, in conjunction with other 
freedom-loving people everywhere in the 
world, rededicate ourselves to the cause 
of human rights, to the cause of demo- 
cratic self-rule and human freedom. We 
reassert our belief that some day the 
repression of the human spirit and the 
special tragedy of totalitarian rule will 
be only a distant chapter in the human 
past. In doing so, we're deeply aware of 
our nation's long struggle toward achiev- 
ing these goals and our own heritage 
of seeking to promote these ideals 
throughout the world. 

Thomas Jefferson told us, "The mass 
of mankind has not been born with sad- 
dles on their backs." And the poet 
Archibald MacLeish once said that some 
say the hope for "... the liberation of 
humanity, the freedom of man and 
mind, is nothing but a dream. They are 
right. It is. It is the American dream." 

Another great American literary 
figure, F. Scott Fitzgerald, suggested 
that America is "a willingness of the 
heart." We've recently read a great deal 
about the young people of this nation 
about whom, some say, this willingness 
of the heart no longer exists. Well, my 
own experiences with this generation 
suggest that the traditional idealism of 
the young, their hope to accomplish 
great things, their willingness to serve 
the cause of humanity are not only in- 
tact but stronger than ever. And like 
every generation before it, this genera- 
tion hungers for a cause, for a mission 
that will take it outside itself and let it 
help lift humanity beyond the material 
and the immediate to new heights of 
human and spiritual progress. 

So today, let us challenge these 
young Americans to make our nation an 
even better example of what it was 
always meant to be— champion of the 
oppressed, defender of all who reach for 
freedom and for the right of self- 

ermination. Let us challenge young 
Americans, excited by technological and 
material progress, to ensure that this 
progress enriches political freedom and 
an dignity as well. Here's a 

challenge that's worthy of our youth, of 
their vision, their energy, and their 
vigor. Let our younger generation lead 
young people throughout the world to 
join the democratic nations in promoting 
human rights and self-government and 
the cause of human freedom. 

The other night at the Kennedy 
Center, they had a choir, a UN choir of 
90 young people, children, in the 
costumes of their native countries from 
all over the world. And looking at them 
down there, singing together, I couldn't 
help but think, "Good Lord, if we turn it 
all over to them, they'd get along just 
fine together." And maybe the world 
should follow their lead. 

There is in the Book of Genesis a 
story of great loss. It's a story of man 
alienated from his fellow man and turn- 
ing to persecution and hatred for others. 
Well, I believe that history is slowly 

working itself back to the restoration of 
brotherhood and mutual respect among 
all the peoples of the Earth. So today, 
we rededicate ourselves to this vision 
and mission. We do so mindful that 
human might and will alone cannot 
achieve this goal, aware that our 
ultimate success will be determined by 
our faith in the power of prayer, in the 
promises of Him who made us and even 
now guides us in our quest for human 
dignity and freedom. 

And now I shall quit talking and 
sign the proclamation. 

Today is now, for the week begin- 
ning today, it is now recognized official- 
ly as Human Rights Week. And the 15th 
will be Bill of Rights Day. 

'Texts from Weekly Compilation of 
Presidential Documents of Dec. 17, 1984. 

Strategic Defense Initiative 

NOV. 27, 1984 1 

Since the advent of nuclear weapons, we 
have largely depended upon the threat 
of prompt nuclear retaliation to deter 
aggression. This approach has worked, 
and we, along with our allies, have suc- 
ceeded in protecting Western security 
for more than three decades. At the 
same time, we are constantly searching 
for better ways to strengthen peace and 

On March 23, 1983, the President 
announced a decision to take an impor- 
tant first step toward investigating the 
possibility of an alternative future which 
did not rely solely on nuclear retaliation 
for our security. This involves an inten- 
sified research program aimed at 
establishing how we might eliminate the 
threat posed by nuclear armed ballistic 

The Strategic Defense Initiative 
(SDI) is a research program consistent 
with all our treaty commitments, in- 
cluding the 1972 ABM [Antiballistic 
Missile] Treaty. The United States is 
committed to the negotiation of equal 
and verifiable agreements which bring 
real reductions in the nuclear arsenals of 
both sides. To that end, the President 
has offered the Soviet Union the most 
comprehensive set of arms control pro- 

posals in history. We are working 
tirelessly for the success of these ef- 
forts, but we can and must be prepared 
to go further. It is intended that our 
research efforts under the SDI comple- 
ment these arms reduction efforts and 
help pave the way to a more stable and 
secure world. 

In the near term, SDI research and 
development responds to the massive 
Soviet ABM effort, which includes ac- 
tual deployments, and thus, provides a 
powerful deterrent to a Soviet breakout 
of the ABM treaty. In the long term, 
SDI may be the means by which both 
the United States and the Soviet Union 
can safely agree to very deep reductions 
and perhaps someday even the elimina- 
tion of offensive nuclear arms. 

In short, through the SDI research 
program the President has called on the 
best scientific minds in our country to 
turn their collective talents toward the 
cause of strengthening world peace by 
establishing the feasibility of rendering 
nuclear weapons impotent and obsolete. 
In doing so, the United States seeks 
neither military superiority nor political 
advantage. Our single purpose with this 
initiative is to search for ways to make 
the world a safer place. 

'Text from Weekly Compilation of 
Presidential Documents of Dec. .3, 1984. 


Department of State Bulletin 


South Asia and U.S. Foreign Policy 

by Michael //. Armacosl 

Address befort tfu WorldAffairs 
cil in Philadelphia on December 12, 
Ambassador Armeteost is Under 
Secretary far Political Affairs. 

It is a pleasure to be here with you to- 
day and to address this distinguished 
council. I would like to speak about 
American interests and policies in South 
Asia— a region that captures public at- 
tention only sporadically in this country. 
Events such as the recent assassination 
of Indira Gandhi, the fifth anniversary 
of the Soviet invasion of Afghanistan, or 
last week's industrial calamity in Bhopal, 
India, however, remind us that South 
Asia is increasing in importance to the 
United States and that there are new 
opportunities for us to develop closer 
relations with the states of that area. 
I hope you will find this evening's 
subject as interesting as I believe it is 
timely. I regard this as a particularly ap- 
propriate forum, for Philadelphia has 
long been a major center of South Asian 
studies in this country. The Philadelphia 
Museum of Art, and perhaps other in- 
stitutions here, will be participating in 
next year's "Festival of India in the 
United States"— the largest and most 
impressive display of Indian art and 
culture ever to come to this country. 

The U.S. Stake in South Asia 

Stretching from Iran to Burma, from 
China to the Indian Ocean, South Asia 
embraces eight nations and over 1 billion 

India dominates the map of the sub- 
continent by its size, and its population 
of 730 million makes it the largest 
democracy in the world. 

Pakistan, a leader of the moderate 
Islamic nations, plays a significant role 
in ensuring the security of the Persian 
Gulf and has been transformed into a 
frontline state by the Soviet occupation 
of Afghanistan. 

Bangladesh, a nation only 13 years 
old, has a population approaching 100 
million; its struggle for basic food self- 
sufficiency and economic progress has 
caught the imagination of the world. 

Sri Lanka, long a bastion of democ- 
racy in the region, occupies a strategic 
location in the Indian Ocean. 

Nepal, Bhutan, and the Maldives 

have their own special strategic and de- 
velopment problems. 

Afghanistan remains a part of 
South Asia, despite the brutal Soviet at- 
tempt to integrate that formerly non- 
aligned country into Moscow's camp. 

America's stake in the independence, 
security, and economic growth of South 
Asia is substantial. 

First, South Asia's size and popula- 
tion, its military and scientific establish- 
ments, and its geographic position be- 
tween the oil-rich Persian Gulf and the 
dynamic economies of East Asia give 
the area geopolitical importance. And 
we have an interest in avoiding conflict 
among the major states of the region. 

Second, we have long been commit- 
ted to helping the region develop eco- 
nomically. Our economic and humani- 
tarian assistance has amounted to over 
$20 billion in the post- World War II 
period. In FY 1985 we will be providing 
$788 million in bilateral economic and 
humanitarian aid and nearly as much 

Regional Trends 

In short, regional developments in South 
Asia are matters of consequence to the 
United States. They are deserving of 
our attention. And several salient trends 
facilitate prospects for greater American 
cooperation with the region. These in- 

• Opportunities for democratic de- 

• A growing awareness of the bene- 
fits of a free-market economy; and 

• A commitment to national inde- 
pendence and regional autonomy. 

There is a democratic heritage in 
South Asia. The vitality of India's demo- 
cratic tradition was demonstrated in the 
wake of Prime Minister Indira Gandhi's 
assassination. Within hours of that 
tragedy, a transition to new leadership 
was underway in accordance with con- 
stitutional principles. Sri Lanka has 
maintained its democratic institutions 
since independence. Pakistan's president 
has promised restoration of civilian 

The major South Asian nations have, at one time 
or another, adopted socialist planning systems as 
the model for economic progress and have experi- 
enced disappointing results. 

again through multilateral organizations. 
Additionally, in commercial terms, the 
long-term trade and investment oppor- 
tunities of the region are immense. 

Third, as in other parts of the 
world, we retain a lively interest in the 
success of democratic institutions in 
South Asia. 

Fourth, South Asia has long been a 
major focus of American efforts to re- 
strain the proliferation of nuclear 

Fifth, the region is a major source 
of heroin smuggled into the United 
States; we are working with the states 
of the area to stop the illegal production 
and trafficking of narcotics. 

government by March 1985 and has 
already held two nationwide local elec- 
tions in the past year. 

While the democratic ideal is a 
powerful force in South Asia, obstacles, 
nevertheless, abound. Recent strife in 
the Punjab has tested India's ability to 
restrain communal passions within a 
secular, pluralistic society. In Sri Lanka, 
the clash of interests between the two 
main ethnic communities poses a serious 
challenge to the principle of majority 
rule with due respect for minority 
rights. Pakistan and Bangladesh are 
governed by martial law regimes, and 
the challenge of returning civilian rule 
weighs heavily on the leaders of both na- 
tions. I need hardly add that the worst 

February 1985 



human rights violations in South Asia 
are occurring in Afghanistan, where an 
imperial power— the Soviet Union— is 
trampling on the sovereignty and inde- 
pendence of a nonaligned country. 
Nevertheless, given the obstacles 
already overcome and the skill and 
political sophistication of the region's 
political leaders, we can be hopeful 
about the future of democratic institu- 
tions in South Asia. 

Democratic impulses in South Asia 
will be strengthened by a growing ap- 
preciation of the benefits of the free 
market. The major South Asian nations 
have, at one time or another, adopted 
socialist planning systems as the model 
for economic progress and have experi- 
enced disappointing results. Consequent- 
ly, one now sees a trend toward greater 
reliance on the private sector as the 
primary engine of economic growth. 

In India, though much of the coun- 
try's heavy industry remains in public 
hands, it is the private sector which is 
most dynamic and accounts for most of 
the GNP [gross national product]. Dur- 
ing the last 3 years, Mrs. Gandhi steered 
India gradually but firmly in the direc- 
tion of economic liberalization, reducing 
bureaucratic red tape, and supporting a 
larger role for private entrepreneurs. 
Her son and successor, Rajiv Gandhi, in 
recent policy pronouncements, has em- 
phasized the need further to unleash the 
private sector. 

Pakistan's experiment with populist 
socialism in the 1970s brought economic 
stagnation and a large foreign debt. A 
return to free-market policies has re- 
stored strong growth rates. Even during 
the recent global recession, Pakistan 
achieved at least a 6% rate of GNP 
growth per annum— an impressive 
achievement by any standard. 

In Bangladesh, the government has 
denationalized 20 firms in recent years, 
and small-scale, privately owned 
businesses are growing rapidly. There 
and throughout the area, such policies 
are stimulating expanded foreign com- 
mercial participation in the region's eco- 
nomic development. 

Most South Asian nations achieved 
independence within the last generation. 
Preservation of their independence, 
unity, and territorial integrity has con- 
sistently been a paramount goal. Fre- 
quently, the nations of the area have 
confronted internal strife and occasional- 
ly conflict with their neighbors. Five 
ago this month— in December 
L979— they witnessed a new challenge: 

the Soviet Union launched a bloody inva- 
sion to snuff out the independence of 
Afghanistan. The Soviets murdered the 
prime minister of the existing com- 
munist government, installed a subser- 
vient puppet regime, and began an in- 
human war of repression that has killed 
tens of thousands of Afghans and 
caused millions of refugees to flee to 
neighboring countries. This unprovoked 
military adventure shook the stability 
and security of the entire region. 

The ruthless Soviet military assault 
on the cities, villages, and people of 
Afghanistan continues. Indeed, it has 
escalated. Soviet troop levels have in- 
creased to 115,000. The total number of 
Afghan refugees in Pakistan and Iran 
has now reached 4 million, perhaps a 
quarter of the prewar population. The 
predatory character of Moscow's aims 
and the appalling brutality of its military 
tactics mock Soviet claims to be the 
champion of the oppressed in the Third 
World. The Soviet policy of sending 
substantial numbers of Afghans — many 
of them children — to the Soviet Union 
for indoctrination is one of many mani- 
festations of Russian colonialism in 
South Asia. 

Poorly equipped irregular Afghan 
resistance units continue to defy one of 
the world's most powerful military 
machines. Even in Kabul, where the 
Soviets have concentrated major forces 
to ensure security, repeated mujahidin 
attacks this fall have dramatized the 
strength, the courage, and the resilience 
of the Afghan resistance. The Soviets 
thus face the prospect of a savage, ex- 
pensive, protracted, and inconclusive 
bloodletting in Afghanistan. 

In its attempt to extricate itself 
from the Afghan quagmire, the U.S.S.R. 
has tried unsuccessfully to cow Pakistan, 
a staunch opponent of the puppet 
regime in Kabul and now host to the 
world's largest refugee population. Paki- 
stan resolutely refuses to accept the 
Soviet occupation of Afghanistan. Yet 
neither crossborder military attacks nor 
attempts at political intimidation have 
succeeded in precipitating changes in 
Pakistani policies. 

U.S. Policies 

In contrast to the Soviet occupation of 
Afghanistan and its attempts to intimi- 
date other states of the region, U.S. 
policy is directed toward promoting the 
independence, nonalignment, and terri- 
torial integrity of the nations and 
peoples of South Asia. Our policy is to 
oppose aggression, encourage regional 
reconciliation, and to urge the peaceful 
resolution of disputes. We seek to nur- 
ture democratic institutions and foster 
regional economic growth. Let me 

• In Afghanistan, we oppose 
Moscow's occupation and seek a 
negotiated political settlement to get the 
Soviets out, end the agony of the 
Afghan people, and return the country 
to its former neutral and nonaligned 

• We seek to strengthen the securi- 
ty of Pakistan in the face of Soviet in- 
timidation. We, therefore, provide sup- 
port for Pakistan's security; assistance 
to develop the economy and to help re- 
lieve burdens imposed by 3 million 
Afghan refugees and to help its efforts 
against narcotics; and encouragement in 
the development of democratic institu- 

• We support India's unity, terri- 
torial integrity, and nonalignment, and 
recognize its pivotal role and its special 
responsibilities for regional peace and 
stability. We have intensified our high- 
level policy dialogue and expanded scien- 
tific cooperation. 

• In Sri Lanka, we have consistent- 
ly supported the independence and 
democratic institutions of the country, 
even as we have encouraged the govern- 
ment to address the legitimate aspira- 
tions of its minority Tamil community. 

• In Bangladesh and Nepal, 
America has helped meet basic economic 
needs by providing humanitarian assist- 
ance and promoting sound growth. 

• We endorse the process of South 
Asian regional cooperation and will con- 
sider sympathetically any proposals that 
the South Asians might collectively 
make to us for assistance on a regional 
basis. We also endorse steps, such as the 
Sino-Indian border negotiations, which 
reduce regional tension. 

Our support takes many tangible 


Department of State Bulletin 


Pakistan's opposition to the Soviet 
occupation of Afghanistan has been 

stalwart and courageous; Pakistan's 
humanitarian response to the needs of 
Afghan refugees should be an example 
to the rest of the world. To do our part, 

we are implementing a 5-year, $3.2-bil- 
lion assistance program designed to 
strengthen Pakistan's economy and 
bolster its security in the face of Soviet 
pressure. We have supplemented this aid 
with contributions of more than $350 
million in cash, food, and relief supplies 
to support the Afghan refugees in 

Our security ties with Pakistan com- 
plicate our relations with India. We 
recognize India's concerns about the 
level of armaments of its neighbors, but 
Pakistan has legitimate security require- 
ments in the face of the Soviet threat 
from Afghanistan. We maintained a dia- 
logue with Prime Minister Jndira 
Gandhi's government on this point which 
will continue under her successor, and 
we hope that, over time, our position 
and the interests of Pakistan will be bet- 
ter comprehended by our Indian friends. 

Let there be no misunderstanding: 
the United States should not be involved 
in maintaining regional security and a 
balance of power in South Asia by estab- 
lishing military bases or stationing 
American troops on the subcontinent. 
We have no desire to dominate the 
region. Our interests are best served 
when South Asian nations are stable, 
resilient, and strong; capable of prevent- 
ing outside forces from intruding in 
their regional affairs. 

We envisage our role as one of pro- 
viding support to South Asia's own 
security efforts. As long as India and 
Pakistan are bitterly divided, however, 
the subcontinent will remain vulnerable. 
In the interests of regional stability, In- 
dia and Pakistan simply have to find a 
basis for wider cooperation. We were 
encouraged by the meeting of President 
Zia and Prime Minister Rajiv Gandhi at 
Indira Gandhi's funeral. 

Regional stability and independence 
also require economic growth. Our 
humanitarfan and development assist- 
ance in the region is designed to comple- 
ment these countries' own national pro- 
grams for achieving a better life for 
their citizens. Our aid is specifically 
focused on meeting the human needs of 
those living near or below subsistence 
while providing the necessary tools to 
lift these economies toward sustained 
and well-targeted growth. 

Our development assistance pro- 
grams also contribute to the battle 
against narcotics. Afghanistan and Paki- 
stan are the source of nearly one-half 
the heroin consumed in the United 
States. I cannot overstate the impor- 
tance the United States attaches to 
eliminating this deadly plague. 

U.S. -Pakistani cooperation toward 
this end has already made progress. 
Strong enforcement efforts in collabora- 
tion with U.S. narcotics experts have 
caused opium production in Pakistan to 
plunge from a record 800 tons in 1979 
to an estimated 45-50 tons this year. 

counter the arguments of the militant 
Tamil separatists. Ambassador Walters 
repeated our message of support and en- 
couragement in this effort and ex- 
pressed our readiness to continue co- 
operating with our Sri Lankan friends. 

With India, in the aftermath of Mrs. 
Gandhi's death, we are continuing to 
build on our longstanding bilateral eco- 
nomic and cultural ties. 

Our bilateral AID [Agency for Inter- 
national Development] program for In- 
dia amounts to approximately $200 
million, and our share of assistance pro- 

. . . the United States should not be involved in 
maintaining regional security and a balance of 
power in South Asia by establishing military bases 
or stationing American troops on the subcontinent. 
. . . Our interests are best served when South Asian 
nations are stable, resilient, and strong .... 

Through our aid programs, we are pro- 
moting crop substitution in poppy- 
growing areas. 

Our joint efforts have been less suc- 
cessful so far in reducing drug traffick- 
ing. Opium still is grown in large quan- 
tities in Afghanistan, and much of this 
eventually finds its way to laboratories 
in Pakistan and countries outside South 
Asia where it is processed into heroin. 
Makeshift labs are easy to put up and 
difficult to locate and shut down. The 
Pakistani Government has become par- 
ticularly concerned about the alarming 
increase in heroin addicts at home. In 
1980, there were none. Today, only 4 
years later, there are an estimated 
300,000 addicts in Pakistan. Both our 
governments are now committed to 
vigorous collaboration to eliminate drug 
trafficking and processing in Pakistan. 

In response to the communal conflict 
in Sri Lanka, we are providing en- 
couragement and support for its demo- 
cratic government. Ambassador at 
Large Vernon Walters visited Colombo 
earlier this week for discussions with 
President Jayewardene and other Sri 
Lankan leaders. He found that they re- 
main determined to achieve peaceful 
reconciliation with the minority Tamils, 
to meet the reasonable demands of 
Tamils for some devolution of govern- 
ment authority to local bodies, and to 

February 1985 

vided by multilateral agencies amounts 
to an additional $500 million. With 
India's strong scientific and technologi- 
cal base, our new assistance activities 
will be m areas of more sophisticated re- 
search and higher technical training 
than in the past. 

We anticipate that our bilateral 
political relations will continue to grow 
closer under Mrs. Gandhi's successors. 
Since 1982, when Mrs. Gandhi visited 
the United States, our two governments 
have intensified the high-level policy 
dialogue on bilateral, regional, and 
global issues. Since then, Vice President 
Bush and Secretary Shultz have made 
official trips to India, and a number of 
Indian officials have come here. These 
consultations increase understanding. 

American policies toward India and 
Pakistan are also strongly influenced by 
our desire to prevent the introduction of 
new nuclear explosives capabilities into 
the region. New Delhi carried out a so- 
called peaceful nuclear explosion in 
1974; Pakistan responded with a nuclear 
program of its own. 

It is no secret that the United States 
and much of the world community have 
been deeply concerned over the possibili- 
ty that both India and Pakistan are pur- 
suing programs that could lead to the 
development of nuclear weapons. Unfor- 
tunately, neither has taken the steps 
that could put these fears to rest. De- 



spite our continued urging that they do 
so, neither nation has become a party to 
the nuclear Nonproliferation Treaty. 
Moreover, each has continued to develop 
its nuclear energy program, including 
sensitive nuclear fuel cycle activities that 
could be used for an explosives program. 

These developments affect our rela- 
tions with both countries. U.S. legisla- 
tion conditions our nuclear cooperation 
with other countries on their acceptance 
of international safeguards on all their 
nuclear activities. So long as India and 
Pakistan refuse to accept such compre- 
hensive safeguards, we are unable to 
contribute significantly to their develop- 
ment of nuclear energy for peaceful pur- 

In 1979, the United States ter- 
minated nonfood assistance to Pakistan 
because of concerns about its nuclear ac- 
tivities. When we resumed aid in 1981, 
we designed a multiyear program with 
three purposes: 

• To help Pakistan stand up to 
Soviet aggression and intimidation; 

• To reaffirm our traditional sup- 
port for Pakistan as a valued friend in 
the region and in the Islamic world; and, 
of equal importance, 

• To persuade Pakistan that nuclear 
weapons are neither necessary nor de- 
sirable for enhancing its security. 

We are confident that our message 
has been heard and understood by 
Islamabad. We have received recent 
assurances from the Pakistani Govern- 
ment as to the peaceful nature of its 
nuclear program, and we are confident 
that our aid has constrained its acquisi- 
tion of nuclear explosives. We will con- 
tinue to stress the seriousness with 
which we would view any Pakistani 
move toward their development. 

But if the spread of nuclear weapons 
on the subcontinent is to be prevented, 
it will take a commitment on the part of 
both India and Pakistan. 

We have welcomed recent state- 
ments by Prime Minister Rajiv Gandhi 
and President Zia-ul-Haq reaffirming the 
peaceful nature of their nuclear pro- 
grams. We will continue to encourage 
both nations to accept safeguards on all 
their nuclear facilities. A number of pro- 
als have been advanced that could 

Lge Pakistan and India in construe- 
(i- toward lessening tension in 

region and eliminating a source of 
fear and distrust on both sides. These in- 
clude a binding declaration renouncing 
acquisition of nuclear weapons; accept- 
of full-scope International Atomic 

Energy Agency safeguards; adherence 
to the Nonproliferation Treaty; and 
mutual inspection of nuclear facilities. 
There may be other such ideas worth 
pursuing. The alternative, however — the 
spread of nuclear weapons in the area — 
would unquestionably be a destabilizing 
force of major concern not only to the 
nations of the region but to the world 
community as well. 


For all these reasons, South Asia is a 
region whose promising prospects and 
continuing challenges argue for a high 
priority in U.S. policy. It is a time for 
closer cooperation, including that 

fostered by private enterprise and 
private exchanges. Policymakers cannot 
ignore South Asia; nor should an in- 
formed citizenry. The trends we see in 
South Asia are congruent with Amer- 
ica's unique mix of strengths. They re- 
quire us to help our South Asian friends 
in their quest for progress, democracy, 
and security. This will be no easy task, 
but it is an opportunity consistent with 
the mainsprings of our own national 
genius. I am confident that we and, our 
friends in South Asia, working together, 
will meet those challenges and, in the 
process, will serve the long-term in- 
terests of the United States and the 
talented peoples of South Asia. ■ 


Five Years of Occupation 

The follounng paper was prepared by 
Paul Trottier, intelligence research, 
specialist for South Asia, and Craig 
Karp, Afghanistan analyst, of the 
Bureau of Intelligence and, Research in 
December 198U- 


After 5 years of Soviet occupation, 
Afghanistan remains a turbulent, war- 
torn country. During the past year, the 
Afghan resistance continued to wage 
guerrilla warfare, thwarting Soviet ef- 
forts to extend regime control. With a 
modest increase of its troops in 
Afghanistan, the Soviet Union was 
unable to force a dramatic reduction in 
the resistance. 

Although the military impasse con- 
tinues, significant changes occurred in 
both Soviet and resistance tactics. The 
U.S.S.R. has stepped up the pace of the 
war since Konstantin Ghernenko became 
the Soviet leader in February 1984. The 
Soviets increased attacks on civilians, 
expanded their use of air power, 
employed high-level saturation bombing, 
and deployed Soviet forces more often 
and in greater number. 

The mujahidin (resistance fighters) 
offset these intensified Soviet actions by 
using more sophisticated weaponry and 
tactics and improving cooperation 
among various fighting groups. These 
changes were most apparent in their 
defense of the Panjsher Valley against 
the seventh Soviet offensive and during 

the mujahidin attacks on Kabul. 

The Afghan Government in Kabul is 
unable to extend its authority effectively 
outside the capital. The Soviet-backed 
People's Democratic Party of Afghani- 
stan (PDPA) continues to suffer from in- 
fighting, disloyalty, and defections 
among the ranks. 

Living conditions in Afghanistan 
continue to deteriorate. With fighting 
throughout the country, no one in 
Afghanistan can feel secure. Food, elec- 
tricity, fuel, and medical care are fre- 
quently in short supply. Although the 
flow of refugees from Afghanistan to 
Pakistan has diminished considerably 
since 1982, the presence of the largest 
refugee population in the world strains 
the resources of Pakistan. Meanwhile, 
violations of Pakistan's territory by the 
Democratic Republic of Afghanistan 
(DRA) continued throughout 1984. 
Overflights and shellings increased in 
frequency and intensity during August 
and September. 

No significant progress occurred in 
the UN-sponsored negotiations during 
1984. The United States supports the 
negotiations, as well as the UN General 
Assembly resolution on Afghanistan ap- 
proved again this year. Another round 
of indirect talks is expected in February 

Although the negotiations continue, 
the Soviets appear determined to retain 
control of Afghanistan by remodeling 
the Afghan political and social structure 
in the Soviet image. In the short term, 
this entails maintaining their client 
regime in power in Kabul and cutting off 


Department of State Bulletin 


the resistance from its bases of support. 
Control over countrywide security, 
education, and tin- economy, and the 
development of a committed socialist 
cadre, art' each essential to an apparent 
long-term strategy to "sovietize'' 


In 1984, as since 1980, the Soviets and 
the resistance remain at an impasse with 
neither side able to make significant or 
lasting gains at the expense of their 

enemy. Major combat activity occurred 
in all areas of the country, concentrated 
around the major cities, the Panjsher 
Valley, and provinces bordering 

Eastern Afghanistan 

Kabul. The resistance succeeded in 
threatening the overall security of 
Kabul, the bastion of Soviet/PDPA 
regime control, particularly in late sum- 

mer and fall. Besides occasional 
assassinations and kidnapings of Soviet 
and regime officials, and the occasional 
food and fuel shortages caused by the 
resistance interdiction of supply con- 
voys, the resistance used ground 
assaults, rocket attacks, electrical 
outages, and bombings to make Kabul 
appear at times to be a city under siege. 

As a result of these attacks, the 
security situation deteriorated substan- 
tially. The Soviets responded by tighten- 
ing security throughout the city and 
around the airport and by increasing 
retaliatory attacks on areas from which 
the mujahidin had launched their at- 

The heaviest fighting inside Kabul in 
1984 occurred in September. On 
September 24 the resistance coordinated 
a heavy assault on several targets, in 
one of the largest attacks on Kabul since 
the war began, that culminated in an in- 
tense 2-hour battle near the military 
base at the Bala Hissar fortress in the 
heart of the city. Fifteen Soviet armored 
vehicles were destroyed and 40-50 

Afghan soldiers killed in the clash. As is 
typical after such attacks, the Soviets 
retaliated with air and ground forces, 
targeting villages south of Kabul and in- 
flicting civilian casualties. 

Throughout the year the resistance 
regularly and successfully rocketed 
selected areas of Kabul but sometimes 
struck unintended targets. Rockets 
landed near the U.S. Embassy and other 
foreign missions, where only minor 
damage occurred, and other parts of the 
city, where greater damage sometimes 

In the latter part of the year, rocket 
attacks occurred with increasing fre- 
quency and intensity. One of the most 
intense attacks occurred on September 
28 with at least 16 or 17 rockets hitting 
the eastern part of Kabul. Afterward, 
Soviet helicopters characteristically 
retaliated against the civilian population 
in villages south of Kabul. In another in- 
cident, the Soviet Embassy celebration 
of the anniversary of the October 
Revolution was disrupted when the 
sound of rockets exploding nearby 


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• '• net ffcm*mr*i tu!tio"Ut<«» f 

International boundary 

Province boundary 

National capital 


Surfaced road 

Unsurfaced road 



Refugee areas in Pakistan 

1 00 200 300 


February 1985 



caused the hurried departure of guests. 
In late November and early December, 
Kabul suffered additional major rocket 

The resistance caused severe elec- 
trical outages in Kabul during August 
and September by destroying a series of 
pylons from the hydroelectric plant at 
Sorubi, east of Kabul. During this opera- 
tion the resistance obtained the col- 
laboration of a local tribal group which 
the Soviets previously had attempted to 
coopt. This action was filmed by a televi- 
sion crew and broadcast in the United 
States. After the operation was com- 
plete, the entire group of over 4,000 
men, women, and children made the 
long trek to Pakistan. As a result of 
these attacks, severe shortages of elec- 
tricity occurred in Kabul for several 
weeks. Most homes were without elec- 
tricity, and many factories were forced 
to curtail operation, further damaging 
Kabul's troubled industrial sector. 

Resistance bomb attacks in 1984 
seriously threatened security inside 
Kabul. The most serious was a bomb set 
off at Kabul International Airport on 
August 31, which caused more than 100 
casualties, including 28 deaths. The 
Soviets then tightened security at the 
airport, and the regime publicized the 
capture and execution of the nine in- 
dividuals allegedly responsible. 

The resistance further undermined 
security at the airport by using im- 
proved surface-to-air missiles (SAMs), 
evidenced by the destruction in flight of 
several helicopters and transports. In 
September the resistance damaged 
Ariana Afghan Airlines' lone DC-10 
which was later repaired and returned 
to Kabul. At times, the Soviets were 
forced to curtail air activity, and later 
upgraded military facilities near the air- 
port, including new deployments of ar- 
mor and artillery. By the end of the 
year, Kabul was regularly illuminated by 
brilliant flares fired from aircraft during 
landing or takeoff, an apparent defen- 
sive measure against mujahidin use of 
heat-seeking SAMs. 

As in previous years, political kill- 
ings inside Kabul were frequent. In June 
and again in November, there was a 
rash of assassinations — mainly of 
military officers and secret police 
agents. Some of these assassinations can 
lie attributed to resistance activity, but 
many others were probably the result of 
longstanding factionalism within the 
Afghan Government. 

Panjsher Valley. The Panjsher 

Valley is a traditional center of 
resistance. Since their invasion of 
Afghanistan, the Soviets have found the 
Panjsher to be a haven for resistance 
forces periodically seeking to interdict 
food and fuel convoys traveling south on 
the Salang highway to Kabul. The 
regime and the Soviets are chagrined at 
the growing domestic and international 
reputation of the local resistance com- 
mander, Ahmad Shah Mahsud, who is 
affiliated with the J amiai-i-hlam.i. 

The Soviets broke the truce con- 
cluded with Mahsud in 1983 and 
launched a major offensive against the 
Panjsher beginning in late April and 
ending in early May. This was the 
seventh offensive since 1979 and includ- 
ed the first use in Afghanistan of heavy 
bombers based in the Soviet Union. 
These planes carried out high-altitude 
carpet bombing missions over the valley. 
The Soviets committed 20,000 troops, 
the largest number ever used in a 
Panjsher operation. They were sup- 
ported by several thousand Afghan 
troops and about 500 armored vehicles. 
Large numbers of Soviet and Afghan 
troops also moved into adjacent areas, 
including the Andarab Valley, in an at- 
tempt to seal off the Panjsher and to 
prevent the resistance from escaping. 

The Soviets failed to achieve either 
of their two major objectives — destroy- 
ing the resistance in the valley and 
eliminating Mahsud. As in previous of- 
fensives, the mujahidin withdrew from 
the valley floor to the surrounding 
mountains and side valleys, counterat- 
tacking at every opportunity. Resistance 
losses were heavy, but their forces re- 
mained intact, while Soviet and regime 
troops probably suffered greater losses. 

Simultaneously, the Soviet-directed 
secret police, the KHAD, made several 
attempts to assassinate Mahsud. Regime 
confidence in the success of these at- 
tempts led Radio Kabul to announce his 
death shortly after the offensive began. 
Mahsud learned of the timing and scope 
of the offensive in enough time to 
evacuate mujahidin and civilian popula- 
tion from the valley. 

At the end of 1984, the Soviets con- 
tinued to garrison bases from the 
southern mouth to around the middle of 
the Panjsher Valley at Peshghor. Com- 
bat continues, particularly near Bazarak 
and Rokheh. The Soviets conducted a 
second sweep operation of limited inten- 
sity and duration in the late fall in order 
to retain Soviet/DRA positions in the 
valley for the winter. 

Pakistan Border Areas. The 
Soviets stepped up efforts to seal off 
border-crossing routes from Pakistan. 
Sweep operations, caravan ambushes, 
and airstrikes were frequently conducted 
in Paktia, Paktika, Nangarhar, and 
Konarha Provinces. Garrisons were for- 
tified and reinforced with Soviet and 
Afghan troops. 

Despite a higher Soviet and DRA 
profile in the border areas, a number of 
resistance groups cooperated and suc- 
ceeded in besieging Soviet and regime 
posts in the Khowst area in Paktia Pro- 
vince. Garrisons often could be resup- 
plied by air only, which was risky and 
vulnerable to interdiction. Reportedly, 
Afghan regime governors held only four 
of the province's 23 districts in 
September 1984. Practically all the ma- 
jor parties, both fundamentalist and 
moderate, are represented in the in- 
surgent force in Paktia. 

Jaji (Ali Khel), also in Paktia, and 
Barikot, farther north in Konarha Pro- 
vince, have been besieged by several 
resistance groups. Both towns lie close 
to the Pakistan border, on traditional 
routes through the mountains. These 
garrisons hinder mujahidin movement 
through the passes but are under such 
pressure that they are supplied by air. 
Soviet/DRA efforts to relieve that 
pressure include airstrikes, which 
several times in recent months spilled 
over the Pakistan border. To justify 
these attacks, Kabul has accused 
Pakistani forces of attacking the posts. 
The charges have been rejected by 
Pakistan, which has strenuously pro- 
tested the violations of its territory. 

Paghman. Successive waves of 
Soviet air and ground assaults in late 
1984 forced out most of the resistance 
operating in Paghman, a former resort 
town only 20 kilometers from Kabul. 

Southern Afghanistan 

Qandahar. In Qandahar, probably the 

most war-torn city in Afghanistan, 
fighting took place inside the city nearly 
every night. During the day, residents 
were often subjected to arbitrary bomb- 
ing and strafing by Soviet helicopters 
from the nearby air base. House-to- 
house searches, arbitrary bombings, and 
frequent gunfights between regime 
soldiers and the resistance continued as 
in previous years. 

The road linking the city and the air- 
port is no longer safe even for armored 
personnel carriers (APCs). The governor 
of Qandahar, who previously traveled to 


Department of State Bulletin 


work m an A PC. is now Forced to stay 
at the nearby Soviet air base and to 
make his rare visits to the city solely by 
helicopter. Late in the year, the Soviets 
strengthened their garrisons in the area, 
presaging more winter activity by Soviet 

Western Afghanistan 

Herat. Approximately half of the city 
has been destroyed by bombardment. 

Although Hi-rat had a population of 
nearly 150,000 before the Soviet inva- 
sion, today entire sections of the city are 
almost deserted. Money is in short sup- 
ply, and little employment is available. 
In early June 1984, the Soviets carried 
out their largest offensive against 
resistance bases in and near Herat since 
the invasion. In the face of overwhelm- 
ing opposition (10,000 Soviet and 5,000 
DRA), the resistance fought a delaying 
action, trying to keep casualties to a 
minimum, while retreating from their 
positions in and around the city to the 
mountains in the north. Some resistance 
forces took temporary sanctuary in Iran. 
In the fall, the Soviets again concen- 
trated troops and artillery in the Herat 
area and began to move against the 
resistance. As in the Qandahar area, 
climatic conditions permit fighting in 
western Afghanistan to continue 
throughout the winter. 

Northern Afghanistan 

In general, the Soviets control the flat 
northern region of Afghanistan, which 
borders Soviet Central Asia, more effec- 
tively than any of the other four regions. 
This area contains the valuable natural 
gas of the Sheberghan region. Soviet 
troops sometimes have been deployed 
directly into northern Afghanistan from 
the Soviet border. 

Mazar-e Sharif: Mazar-e Sharif re- 
mained relatively calm, although scat- 
tered fighting occurred occasionally at 
night. Afghan troops provide most of 
the security, and the Soviet presence is 
limited inside the city. 

Central Afghanistan 

The Soviets have given the least priority 
to controlling this region, known as the 
Hazarajat, which is the most 
geographically isolated of the five 
regions. Internecine fighting among 
various resistance groups is common. 
Shia and Sunni groups more often fight 
among themselves than against the 

Soviets. Within the Shia groups 
themselves, the Iranian-backed factions 
have fought against the other factions. 
One of the most chilling actions of 
the war apparently took place in the 
Hazarajat, in early November. Their am- 
munition exhausted, a large number of 
mujahidin were forced to surrender to 
a combined force of Soviet/I )RA troops. 
Reportedly, after the mujahidin were 
rounded up, the Soviet commander 
ordered that they all be summarily ex- 


Since the Soviet invasion of Afghanistan 
in December 1970, the Soviets can be 
observed to have both short- and long- 
term strategies for control of Afghanistan. 
The Soviets have experienced considerable 
difficulty in pursuing these strategies over 
their 5 years of occupation, yet the Soviet 
Government continues both approaches. 

Short-Term Strategies 

Foremost among their immediate goals, 
the Soviets want to maintain the pro- 
Soviet regime in Kabul. The vast majori- 
ty of Afghans are opposed to the Soviet- 
supported regime. Without Soviet 
military backing, the Kabul government 
would most likely be overthrown within 
a short time. The U.S.S.R. keeps suffi- 
cient troops in Afghanistan to assure 
DRA survival and minimum security in 
the capital. 

The Red Army expanded its role in 
1084 and adjusted its tactics to the con- 
ditions of the insurgency. The 
unreliability of the Afghan Army has 
forced the Soviets to rely on their own 
forces. The Soviets employed superior 
military force to overwhelm the 
resistance, using tactical air support and 
large numbers of troops to sweep 
through areas of resistance strongholds. 

At the same time, because of the 
relative failure of conventional combat 
methods, the Soviets are gradually plac- 
ing more emphasis on counterinsurgency 
tactics. Unconventional operations on a 
reduced scale involving helicopter gun- 
ships and small bands of Soviet soldiers 
are more common now than in previous 
years of occupation. 

The Soviets' short-term strategy 
consists of controlling all urban areas in 
an attempt to control the Afghan 
population. Urban populations are ac- 
cessible and less able to provide sanc- 
tuary to the resistance than in the 

remote countryside. In Kabul, Mazar-e 
Sharif, and some other urban centers, 
the people depend on Soviet imported 
food and fuel. Furthermore, employment 
and education can be monitored and 
manipulated more easily in cities. 

The Soviets are trying to reduce the 
ability of the resistance to operate in the 
countryside. Their classic counterin- 
surgency strategy involves simultaneous- 
ly reducing the population outside areas 
of regime control that can shelter and 
support the guerrillas and restricting the 
surplus food and other materials needed 
to provide such support. In pursuing this 
goal the Soviets use terror tactics, in- 
cluding military assaults and retribution, 
to dissuade the Afghan civilian popula- 
tion from assisting the resistance. In 
areas of significant resistance support, 
the Soviets have forced civilians to leave 
the countryside by bombing villages and 
destroying farm land. The depopulation 
of large areas in Afghanistan, either 
because of flight to the cities or emigra- 
tion to other countries, has made it 
more difficult for the resistance to func- 

The Soviets have encouraged the 
Kabul regime to pursue a divide-and-rule 
strategy, similar to the methods used to 
absorb Central Asia into the Soviet 
Union 50 years ago. The regime has of- 
fered bribes of money and weapons to 
the many independent tribes, particular- 
ly in the sensitive regions that border 
Pakistan. This program has often 
backfired, as tribes often take the 
money and guns, and instead support 
the resistance. Also, KHAD agents in- 
filtrate the resistance to assassinate 
resistance leaders, encourage infighting 
among different resistance groups, or 
report on the plans and positions of 
resistance forces. 

In addition to disrupting the 
resistance and cutting it off from local 
support, Soviet strategy calls for closing 
off the lines of communication with the 
refugee areas in Pakistan and Iran. This 
means the garrisoning of areas near the 
border where the government's presence 
always has been limited. Soviet forces 
have in the past year successfully car- 
ried out ambushes of resistance supply 
columns and, less frequently, commando 
raids on resistance camps in 

February 1985 



Long-Term Strategies 

Given the utter failure of their efforts to 
broaden regime support, the Soviets 
have decided to pursue a long-term 
strategy of "sovietization" or building a 
party and an administrative structure in 
Afghanistan modeled along Soviet lines 
and sensitive to Soviet interests. In pur- 
suing this goal the Soviet Union has 
made limited progress. 

In the absence of a negotiated settle- 
ment, Soviet long-term strategy focuses 
on the gradual extension of security and 
control throughout the country and on 
increasing the ability of the Kabul 
regime to perform this task. To imple- 
ment this they have attempted, albeit 
with little success, to rebuild the Afghan 
Army. Ultimately this will require ade- 
quate numbers of recruits who are will- 
ing to defend a pro-Soviet regime, a 
prospect that remains far off. 

An essential element of the Soviets' 
long-term strategy is the focus on the 
new generation. The Soviets hope to 
create a new elite, one committed to a 
pro-Soviet future for Afghanistan and 
which provides a loyal party and ad- 
ministrative cadre. In the schools, com- 
munist ideology is promoted, while tradi- 
tional disciplines are neglected. Soviet 
virtues are extolled in class. Russian 
language study is mandatory at Kabul 

The Soviets send Afghan youth to 
the U.S.S.R. for indoctrination in a set- 
ting isolated from their families and 
Afghan influences, but the success of 
these programs has been mixed. Youth 
training and education programs involve 
around 4,000 students sent to the Soviet 
Union each year for advanced political 
indoctrination. Already 20,000-25,000 
students have been sent for such 
studies, more than 10,000 since 1979. 
Apparently, these few years of in- 
doctrination are insufficient to mold 
loyal cadre. Yet the Soviets began a new 
program in 1984 involving plans to send 
thousands of children between 7 and 10 
years of age, from all provinces to the 
Soviet Union for more than 10 years. In 
November, 870 Afghan children between 
the ages of 7 and 9 were sent to the 
U.S.S.R. for 10 years of schooling. 

Another element of the long-term 
plan is the economic integration of 
Afghanistan into the Soviet orbit. The 
Soviets hope gradually to control more 
and more of Afghanistan's natural 
resources and industry. Natural gas 
from Afghanistan's rich northern 
Sheberghan gas fields is bartered for 
Soviet imports and to repay Afghan 
debts to the Soviet Union. 

The Soviets are still far from fully 
integrating the Afghan economy into 
their own. Afghanistan has been granted 
observer status in the Council for 
Mutual Economic Assistance (CMEA). 
Kabul continues to receive goods from 
India, Pakistan, China, and Japan, as 
well as from Western countries. 
However, such trade has decreased 
and/or shifted to the thriving black 
market. Official figures show that 80% 
of Afghanistan's trade is with CMEA 
countries (70% with the Soviet Union). 

Private enterprise and domestic 
commerce are thus far largely unaltered. 
However, Babrak Karmal announced 
this year that the regime planned to put 
all trading under a network of state- 
owned outlets. 


The Communist Party 

Since its foundation in the late 1960s, 
the People's Democratic Party of 
Afghanistan (PDPA) has suffered a wide 
rift between the Parcham (Banner) and 
Khalq (Mass) factions. The Soviet 
presence forces a coexistence between 
the factions, although outbreaks of 
violence, including assassinations, occur 

The Parcham faction consists 
primarily of urban-educated middle and 
upper class people, who usually belong 
to various ethnic groups other than 
Pashtun. The Parcham, installed in 
power by the Soviets, is the more in- 
fluential faction in government, although 
comprising only about 40% of the 
party's membership. Parcham members 
predominate at the highest levels of 
government and party and dominate 
KHAD (the secret police and intelligence 

The Khalq faction is more 
representative of the majority of the 
Afghan population, primarily rural- 
origin people of Pashtun ethnic 
background. The followers of former 
Presidents Noor Mohammed Taraki and 
Hafizullah Amin, they tend to favor a 
more rapid and radical transformation 
of Afghan society than the pragmatic 
Parcham but also are considered more 
nationalistic. They are predominant in 
the military, especially among the junior 
ranks. Khalqis comprise about 60% of 
the party and control the Ministry of In- 

The Soviet Union exercises ultimate 
authority over party and all significant 
regime political decisions. Political posi- 
tions are gained by party loyalty, not on 
qualifications or experience. 

Regime Politics 

Regime perceptions of its own shortcom- 
ings can be seen in the official media. 
President Babrak Karmal, when exhort- 
ing various groups, often mentions areas 
where performance falls short. He most 
commonly refers to "divisiveness" and 
"factionalism," clear acknowledgment of 
the persistence of the Parcham-Khalq 
split. He has lambasted the police and 
the KHAD for arbitrariness and abuse 
of power. 

In a lengthy address to senior party, 
state, and military officials in January 
1984, Karmal addressed the "failures" of 
his administration. He cited problems 
with military recruitment, training, and 
fighting capability; citizens' allegations 
of bribery charges and corruption in 
KHAD; reports of significant increases 
in thefts and robberies; and party fac- 

The official most strongly criticized 
in that meeting was Minister of Defense 
Abdul Qader, a staunch Parchami. In 
early December he was replaced as 
Defense Minister by Chief of Staff 
Nazar Mohammad, a Khalq-oriented 
military professional who has spent 
several years in the Soviet Union. 

Another significant regime change 
was the posting of former Minister of 
Finance Abdul Wakil, a cousin of Kar- 
mal, as Ambassador to Vietnam. 
Diplomatic assignments to socialist coun- 
tries, as when Karmal himself was sent 
to Prague, have been used by the regime 
to get prominent but unwanted figures 
out of the country where they can do (or 
come to) no harm. 

KHAD. The Afghan intelligence 
service was a small organization under 
the state police with a limited role in in- 
telligence collection and state security 
before the Soviet invasion. After the 
Soviet takeover this service was named 
KHAD, enlarged and strengthened, and 
given authority over all intelligence 
aspects of Afghan affairs at home and 
abroad. Soviet advisers were installed, 
and KHAD became unofficially subor- 
dinate to the KGB. KHAD has frequent- 
ly exercised its power to jail or discredit 
national-level officials, confiscate proper- 
ty, infiltrate the resistance, and indoc- 
trinate the populace in communism. 


Department of State Bulletin 


Afghan Military. Parcham-Khalq 
factionalism contributes substantially to 
the ineffectiveness of the military. 
Armed clashes, low morale, insufficient 
manpower, collaboration with the 
resistance, and lessened security are all 
symptomatic of this dispute. Further- 
more, many conscripts from the military 
defect because of unwillingness to par- 
ticipate in Soviet reprisals on civilians, 
Soviet heavy-handedness and arrogance, 
and the use of Afghan soldiers as "can- 
non fodder." The Afghan military has 
dwindled from about 90,000 troops in 
December 1979 to about 40,000 in late 

The majority of Afghan soldiers are 
conscripted, often by press-gang tech- 
niques, and in 1984 the draft age was 
lowered from 17 to 16. In March, when 
the length of military service for troops 
serving in Kabul was extended from 3 to 
4 years, large numbers of soldiers 
mutinied. Because ofHhe high rate of 
desertions with weapons, Afghan 
soldiers must turn in their equipment 
when not fighting. 

The combination of PDPA infighting 
and the continuing deterioration of the 
Afghan military has resulted in the 
greater use of Soviet combat troops and 
government advisers at all levels of the 
regime. Even so, the internal stability 
and security of the Afghan Government 
remain poor. 


Popular support for the Afghan 
resistance remains firm among the vast 
majority of the Afghan people. The 
resistance movement includes resistance 
fighters in Afghanistan, parties both in- 
side and outside Afghanistan, and the 
refugee and exile community. The 
resistance inside Afghanistan consists of 
independent local bands, usually af- 
filiated to one or another of the parties. 
The important parties have formed a 
three-party "moderate" alliance and a 
seven-party "fundamentalist" alliance. 
Numerous other factions are not in- 
volved in the alliances. 

No major changes occurred in the 
structure of the resistance during 1984. 
Some groups of resistance fighters have 
increased coordination and cooperation 
in the fight against Soviet/DRA forces. 
Nevertheless, fighting between 
resistance groups continues to take 
place. The emergence of a single leader, 
or any real political unity, is as elusive 
as ever. 


Although colleagues and supporters 
of Zahir Shah continued to meet with 
resistance leaders in Peshawar and to 
seek international support for a meeting 
of all factions of the resistance (Loyah 
Jirga), no meeting was held. The efforts 
to forge greater resistance unity around 
ex-king Zahir Shah, begun in 1983, did 
not appear to have made further prog- 
ress, although the three-party alliance, 
which sponsored that initiative, con- 
tinues to function harmoniously. Fun- 
damentalist opposition to any role for 
the former monarch continued and ap- 
peared to have dampened enthusiasm 
for pressing ahead with the proposed 
council meeting. Some shifts of align- 
ment were reported within the seven- 
party alliance. Rivalries and disputes 
undermined efforts to build alliance 

All seven major resistance leaders 
from Peshawar were invited by the 
Pakistan Government to attend the 
Islamic Conference summit in Rabat in 
January 1984. They agreed, for the first 
time, to let fundamentalist leader Pro- 
fessor Burhanuddin Rabbani serve as 

spokesman for the group. Professor 
Rabbani also visited France in April to 
meet with French officials and other 
private groups. 

The Panjsher commander Mahsud 
continued his efforts to make contact 
with and develop plans for cooperation 
with other commanders of the northeast 
region during the first part of the year. 
These efforts appeared to pay dividends 
during the Soviet offensive, as various 
mujahidin groups made efforts to come 
to Mahsud's assistance and divert 
Soviet/DRA forces by opening nearby 
fronts. However, other groups continued 
to dispute supplies and areas. 

In Herat during June, various 
resistance groups cooperated in 
evacuating the city center before the 
beginning of Soviet door-to-door 
searches. In the last part of the year, as 
the Soviets turned their attention to 
Paktia and Paktika, where they hoped to 
cut the infiltration routes, effective 
resistance cooperation included affiliates 
of the three-party moderate alliance. 

Resistance commanders from inside 
the country continued to voice corn- 

February 1985 



plaints against the parties' leaders. 
Charges included unequal distribution of 
support, selling arms for personal 
enrichment, and lack of contact with 
what was going on inside the country. 
Many commanders say they maintained 
their allegiances only because it was 
necessary to obtain arms and appeared 
willing to support any leaders who 
would supply them. 

Depopulation of civilians in strategic 
areas became a more serious problem 
for the mujahidin. In the first years of 
the resistance, mujahidin could count on 
shelter and food from villages through- 
out the country. The toll of 5 years of 
fighting has left many areas— especially 
those in the east and close to 
Kabul— almost deserted. Resistance 
leaders are sometimes forced not only to 
carry their own food but also to help 
supply the civilian population. 


With about one-third of its pre-1979 
population displaced, Afghanistan has 
had its social structure and economy 
disrupted in fundamental ways. 
Afghanistan has suffered severe 
deterioration in the areas of health, 
medicine, and education. Nevertheless, 
food and fuel supplies are generally ade- 
quate both among the resistance fighters 
and Afghan civilians. 

Food supplies in Afghanistan are 
comparable to levels prior to the Soviet 
invasion mainly because the destructive 
effects of combat on agriculture and 
transportation have been offset by the 
flight of people to other countries. In 
areas controlled by the Soviets, shor- 
tages occur occasionally as a result of 
resistance interdiction of transportation, 
but prolonged shortages are rare. 

Although there is no current threat 
of widespread famine, poor rain and 
snowfall, Soviet destruction of 
agriculture in a particular area, or inter- 
ruption of trade could change the local 
food situation quickly. For example, the 
Fanjsher offensive — involving massive 
Soviet bombing that destroyed 
agriculture and livestock — has caused 
food shortages among the resistance and 
the local civilian population. 

Although the resistance forces ex- 
perience inadequate food supplies at 

. the need for medicine and medical 
probably greater. Certain in- 
ternational humanitarian organizations, 

■ prominently French groups, such 

as Medicins sans Frontieres and Aide 
Medicate Internationale, are trying to 
alleviate this desperate situation by 
maintaining doctors and rudimentary 
hospitals inside Afghanistan. Soviet and 
regime forces have often tried to bomb 
or attack these clinics and in 1983 cap- 
tured and released a French doctor. 
Education has deteriorated con- 
siderably since the Soviet invasion. The 
school system has ceased everywhere ex- 
cept in a few major cities. Perhaps 80% 
of the Afghan teachers have been ex- 
ecuted or imprisoned or have fled the 


The DRA escalated their border viola- 
tions of Pakistan during 1984. The 
Soviets apparently hope that this will 
slow the infiltration of Afghan 
resistance fighters. These violations also 
can be viewed as an attempt to pressure 
Pakistan in its negotiations with 
Afghanistan, since many of these viola- 
tions occurred at the time of the Geneva 

Airspace and artillery firing viola- 
tions occurred most frequently during 
August and September with the Teri 
Mangal incident, involving over 70 
casualties, being the worst. Violations 
have occurred up to the very end of the 
year. The Soviets and their DRA allies 
are not known to have crossed the 
Pakistan border with ground troops. 

Iranian- Afghan relations soured dur- 
ing 1984. Iran has on several occasions 
protested Afghan violations of their 
border. Some of these incidents may 
have involved ground troop incursions 
on both sides. The Iranian consulate in 
Herat was closed early this year. Subse- 
quently, Iran forced the Afghans to 
close their consulate in Mashhad. 


According to 1984 Pakistan Government 
estimates, there may be as many as 3 
million Afghans in Pakistan, of whom 
2.6 million were registered as refu- 
gees — the world's largest refugee 
population. Most of the refugees are 
located in some 340 camps, primarily in 
the rural areas of the North West Fron- 
tier Province (NWFP) and Baluchistan. 
(See map, p. 29.) 

The Afghan refugees are minimally 
but adequately supplied with food, 
shelter, clothing, and medicine. Relief is 
provided by Pakistan, and by the inter- 
national community primarily through 
the UN High Commissioner for 
Refugees (UNHCR) and the UN World 
Food Program (WFP). Major con- 
tributors to the relief program are Saudi 
Arabia and other Arab states of the 
gulf, Japan, Western Europe, and the 
United States. The U.S. Government 
contributed about $70 million for the 
Afghan refugees in fiscal year 1984, in- 
cluding $49 million through the WFP. 
This was approximately one-third the 
total international contributions for 
Afghan refugee relief. To date, total 
U.S. contributions to the Afghan 
refugee relief program exceed $350 

Traditional notions of hospitality and 
strong ethnic and tribal ties between the 
local inhabitants and the refugees have 
helped to ease the impact of the 
refugees on the local population. There 
has been, however, an undercurrent of 
uneasiness in Pakistan over the Afghan 
presence, which is greater outside the 
areas of ethnic affinity where most of 
the refugees reside. 

The herds of goats, camels, and 
sheep that the refugees bring with them 
destroy, through overgrazing, land in 
the already economically depressed 
areas of the NWFP and Baluchistan. 
Also, the refugees compete with the 
local population for the limited number 
of available jobs. In recent years a large 
percentage of the native male NWFP 
labor force has emigrated to work in 
Persian Gulf countries. Because of 
diminished employment prospects in the 
gulf, some of these workers are return- 
ing to Pakistan, and few are being 
recruited. The prospective competition 
for jobs could fuel tension between the 
Pakistanis and the Afghan refugees. 

The Soviets and KHAD attempt to 
exploit Pakistani resentment of the 
refugee presence. KHAD infiltrators 
have been apprehended by the Pakistani 
authorities. Several violent incidents in 
the refugee areas can be attributed to 
Soviet/KHAD actions designed to in- 
crease tensions between the refugees 
and their hosts. 

To lessen potential resentment of 
the refugees, the Pakistan Government 
has taken several actions. Afghan 
refugees are forbidden to own land or 
businesses. During 1984 the Pakistan 
Government began relocating refugees 


Department of State Bulletin 


from the provincial capitals of NWFP 
(Peshawar) and Baluchistan (Quetta) to 
outlying rural areas for the stated pur- 
pose of alleviating the urban problems 
caused by the refugees. All single 
Afghan males were ordered to relocate 
from housing in Peshawar or nearby 
refugee camps to areas away from the 
city. After a series of bomb explosions in 
Peshawar, Afghan political parties were 
ordered to move their headquarters out- 
side the city. 

In an effort to reduce refugee con- 
centration, the Government of Pakistan 
has relocated some refugees and guided 
new arrivals to other areas but with 
mixed success. Several hundred thou- 
sand places for refugees are planned at 
a group of camps near Mianwali, in Pun- 
jab Province. Many of the original group 
sent there moved away in the hot sum- 
mer months to cooler encampments in 
the mountains of the NWFP. Plans to 
relocate refugees within Pakistan have 
met with mixed success in the past. 

There are about 800,000 Afghan 
refugees in Iran, but most refugees live 
among the Iranian population and not in 
camps. Iran provides limited assistance 
to the refugees through the govern- 
ment's own resources, and some aid is 
received from UNHCR. 


Since January 1980, the UN General 
Assembly has voted six times, each time 
by overwhelming margins, for a resolu- 
tion expressing grave concern at the 
continuing foreign armed intervention in 
Afghanistan and calling for the complete 
withdrawal of the foreign forces; the in- 
dependent and nonaligned status of 
Afghanistan; self-determination; and the 
creation of conditions that would enable 
the refugees to return home with safety 
and honor. The most recent passage of 
this resolution occurred on November 
15, 1984. The resolution was sponsored 
by Pakistan and called again for the im- 
mediate withdrawal of the foreign 
troops from Afghanistan. It was adopted 
by a vote of 119 to 20, with 14 absten- 
tions, the widest margin to date. 

During the debate, the Soviets and 
the DRA insisted that the situation in 
Afghanistan was an internal Afghan 
matter and, therefore, not a fit subject 
for UN scrutiny and that the presence of 
Soviet troops was a bilateral matter 
governed by a treaty between the two 

countries. They have stated that Soviet 
troops would no longer be necessary and 
would be withdrawn after "outside in- 
terference" had ceased. 

The Kabul regime and the Soviet 
Union demand that "noninterference" be 
guaranteed by Pakistan and interna- 
tional powers, possibly to include the 
United States, and appear reluctant to 
accept extensions of the guarantees to 
any other part of an agreement. 

Pakistan continues to refuse to 
recognize or talk with the Karmal 
regime and refuses to pledge anything 
before there is a Soviet agreement to 
withdraw. Pakistan has expressed its 
wish that international guarantees cover 
all points of an agreement. 

UN attempts to negotiate a settle- 
ment date from a November 1980 man- 
date of the General Assembly. Negotia- 
tions are led by UN Under Secretary 
General for Special Political Affairs 
Diego Cordovez as a personal represent- 
ative of the Secretary General. Talks 
have been held periodically in Geneva. 
Cordovez shuttled between delegations 
from Pakistan and Afghanistan, official- 
ly informing Iran of the discussions 
while unofficially informing the Soviets. 
The third and latest round of UN- 
sponsored indirect talks in Geneva be- 
tween Pakistan and Afghanistan was 
held from August 24 to August 31, 
1984, and ended without progress. 

Despite the hopes that were 
generated during the 1983 talks, the 
sides remain far apart. The Soviet Union 
has not substantially altered its original 
position. Essential questions, such as 
self-determination for the Afghans, con- 
sultations with Afghan representatives, 
the identity of guarantors, and the exact 
nature of guarantees, have yet to be ad- 
dressed. But both sides are committed 
to continuing the talks, and another 
round is scheduled for February 1985. 

The United States continues to sup- 
port the UN negotiating process based 
on the four points of the UN resolution. 
Also, the United States supports efforts 
to achieve unity of all Afghan groups, 
whether in exile or struggling inside the 


In their quest to control Afghanistan, 
the Soviets and their Afghan proxies are 
not likely to defeat the Afghan 
resistance. Nor is the resistance likely to 
oust the Soviets by force of arms. 

Although the Soviet combat strategy 
in Afghanistan has become more ag- 
gressive in 1984, troop levels did not in- 
crease substantially during the year. 
Without a major change in force levels, 
the Soviets will not be able to further 
their control. The Kabul regime will re- 
main incapable of ruling — internally 
divided and with no significant popular 

The Afghan people, on the other 
hand, despite tremendous privations and 
the dislocations attendant to modern 
warfare practiced against a traditional 
society, show every sign of persevering. 
Their support for the resistance seems 
unflagging. While some resistance 
groups increased cooperation during 
1984, a broad degree of unity still would 
be insufficient to militarily eject the 
Soviets. Yet the Soviets are unable to 
prevent the resistance from effectively 
attacking in all areas of the country, in- 
cluding Kabul, the nerve center of 
Soviet control. 

There appears to be little prospect 
that a negotiated settlement will be con- 
cluded soon. The Afghan people thus 
will continue to suffer from casualties, 
dislocation, and other traumas of war 
for the forseeable future. ■ 

February 1985 



U.S. Confirms Withdrawal 

Following are the text of Secretary 
Shultz's letter to Amadou-Mahtar 
M'Bow, Director General of the UN 
Educational, Scientific and Cultural 
Organization (UNESCO), and a state- 
ment by Assistant Secretary for Interna- 
tional Organization Affairs Gregory J. 
Newell of December 19, 1984. 


December 19, 1984 

Dear Mr. Director General: 

After serious review of developments 
during 1984, the United States Government 
has concluded that its decision to withdraw 
from membership in the United Nations 
Educational, Scientific and Cultural Organiza- 
tion will stand. Regrettably, the evidence 
that could have persuaded us to rescind or 
modify our original withdrawal notice is not 
present. As provided in Article II, paragraph 
6, of the Constitution, therefore, the United 
States shall cease to be a member of the 
Organization at the end of the current calen- 
dar year. 

With further regard to Article II, 
paragraph 6, of the Constitution, the financial 
obligations of the United States owed to the 
Organization on December 31, 1984, shall be 
unaffected by withdrawal. In this respect, the 
United States is unaware of any financial 
obligation to the Organization not covered by 
credits due to the United States. Moreover, 
the credits due to the United States in fact 
exceed outstanding United States obligations 
as of December 31, 1984. The precise 
amount, therefore, to be paid to the United 
States remains to be determined. 

Following the effective date of United 
States withdrawal from membership, we in- 
tend to maintain an observer mission at the 
Headquarters of the Organization. The 
primary purpose of that mission shall be to 
facilitate such participation in the activities of 
the Organization as may be appropriate 
under the procedures and practices of the 
Organization and its organs, including the 
General Conference and the Executive 
Board. In addition, that mission shall serve to 
represent the United States in connection 
with any matters ancillary to the United 
States withdrawal from membership in the 
Organization, including any residual financial 
tions, should they arise. 

My government will announce its inten- 
tion to name a reform observation panel of 

igllished Americans, the purpose of 
which will be to assess and report to the 
Department "I State on events and 
dev< lopmenta within UNESCO. It should 

serve, also, to facilitate the active coopera- 
tion of the United States with member 
states — and with the Organization itself as 
such cooperation may be appropriate — in 
order to advance efforts at reform. 

You will know from our presentations to 
you, to the Executive Board, and to other in- 
terested parties, just what changes in 
UNESCO we now deem necessary. We hope 
that the reform process will continue, even 
though the changes made in 1984 were insuf- 
ficient to warrant revision of our prior deci- 
sion. Sufficient reform in 1984 would have 
caused a change in our view; sufficient 
reform in the future could lead us, once 
again, to join in the important work that 
ought to be, and once was, UNESCO's pride. 

We will, for the benefit of others, and as 
a contribution to Third World development, 
continue to make a significant and concrete 
contribution to international cooperation in 
education, science, culture, and communica- 
tions. To advance that cause, we will seek to 
use other existing methods and work through 
other existing means. In those efforts, we 
would welcome any cooperation with 
UNESCO that you and we find mutually ap- 

In closing, I would urge you to use your 
considerable influence to help bring about the 
reforms and improvements in UNESCO 
which alone will enable the Organization once 
again to command the enthusiastic support of 
its membership. 

Sincerely yours, 

George P. Shultz 

The Honorable 

Amadou-Mahtar M'Bow 

Director General of the 
United Nations Educational » 
Scientific and Cultural Organization, 


One year ago, the United States notified 
UNESCO that U.S. membership would 
terminate on December 31, 1984. We 
have confirmed today that U.S. 
withdrawal from UNESCO will take ef- 
fect on that date. 

UNESCO policies have, for several 
years, departed sharply from the 
established goals of the organization. We 
have regularly advised UNESCO of the 
limits of U.S. (and Western) toleration 
of misguided policies and programs and 
of repeated management failures. The 
circumstances that impelled us, last 
year, to announce our plan to withdraw 

have not changed sufficiently, this year, 
to warrant a change in our decision: Ex- 
traneous politicization continues, as 
does, regrettably, an endemic hostility 
toward the institutions of a free 
society — particularly those that protect 
a free press, free markets, and, above 
all, individual human rights. UNESCO's 
mismanagement also continues, and ap- 
proximately 80% of its $374 million bien- 
nial budget is still spent at its Paris 
headquarters, leaving only 20% to be 
spent elsewhere. 

UNESCO has made efforts to 
reform itself during the past year. Tak- 
ing the pattern of UNESCO's own past 
performance as the point of reference, 
we can agree that those efforts appear 
genuine. Viewed, however, in light of 
the serious concerns we expressed last 
December, an unacceptable gap clearly 
remains. An independent monitoring 
panel of eminent American experts for- 
mally reported a similar conclusion to 
the Secretary of State on November 27, 
1984. The panel noted that there was 
considerable discussion and some in- 
cremental movement in the direction of 
the fundamental concerns of the United 
States but that there was no concrete 

The United States remains commit- 
ted to genuine and effective interna- 
tional cooperation that serves the 
legitimate needs of developing nations. 
We intend to continue support for inter- 
national activities in the fields of educa- 
tion, science, culture, and communica- 
tion through other existing channels: 
multilateral, regional, bilateral, and 
private sector institutions. 

Nevertheless, we remain committed 
to the belief that genuine reform of 
UNESCO is a desired goal. We are in- 
terested in such a renovation. We ap- 
preciate the labors of all those — coun- 
tries and individuals alike — who have 
worked to return UNESCO to its 
original purposes. We intend, during the 
coming year, to labor still with those 
supporters of UNESCO. 

As the President stated in his recent 
address to the United Nations, we sup- 
port genuine and effective multilateral 
cooperation. To help return UNESCO to 
that purpose, we have in mind a three- 
pronged approach. 


Department of State Bulletin 



• To promote UNESCO's 
reform— from the outside— the United 
States will designate a reform observa- 
tion panel of independent experts. It will 
be charged to assess and report on 
events within UNESCO and to advance 
our continuing interest in reform. 

• We will work with all those — 
countries, individuals, and private 
organizations — who seek improvement 

• We will establish an observer mis- 
sion in Paris to protect American in- 
terests at UNESCO and to work with 
like-minded member states on reform 
measures, particularly between now and 
the end of UNESCO's 23d general con- 
ference in 1985. 

When UNESCO returns to its 
original purposes and principles, the 
United States would be in a position to 
return to UNESCO. ■ 

Latin America: The Struggle 
To Restore Economic Growth 

by Kenneth W. Dam 

Address before the World Affairs 
Council in Dallas on December 5, 198U. 
Mr. Dam is Deputy Secretary of State. 

I recently returned from 10 days in 
Latin America. I was not in Central 
America, where the headlines are. I 
went to South America, and I should like 
to share with you what I saw there 
because it applies in most ways 
throughout the hemisphere, including 
Central America and the Caribbean. 

I visited three countries — Peru, 
Bolivia, and Argentina. Each has sear- 
ing social and political problems. Argen- 
tina still feels the wounds of a "dirty 
war" between extremes of left and right. 
Bolivia is bedeviled by poverty, political 
instability, and organized narcotics traf- 
ficking. Peru, like Bolivia, is beset by 
drug trafficking; in addition, it is com- 
bating a nihilist guerrilla movement. 

What struck me most, however, was 
that in all three countries I found 
civilian governments working hard to 
consolidate democracy in the face of 
their most severe economic crisis since 
the Great Depression. In all three, I 
found individual leaders struggling, 
often with great courage, against enor- 
mous odds. It is their struggle — a strug- 
gle to restore economic growth while 
maintaining social and political sta- 
bility — that I should like to discuss with 
you today. 

Near-Term Successes 

In the last few years, the international 
economic agenda has been dominated by 
the $800-billion Third World external 
debt. When the debt crisis erupted in 
1982, it threatened the viability of the 
international economic system. In a first 
response, the United States and other 
industrial democracies immediately 
undertook emergency financing meas- 
ures to overcome the lack of liquidity in 
particular countries. This was followed 
rapidly by a second phase, in which the 
IMF [International Monetary Fund] and 
the World Bank sought to support short- 
term stabilization and economic adjust- 
ment on a case-by-case basis. 

It is now apparent that some impor- 
tant near-term successes have been 
scored. The total current account deficit 
of the seven largest Latin American 
debtors (Argentina, Brazil, Mexico, Co- 
lombia, Chile, Peru, and Venezuela) — 
who together hold about half of the 
Third World debt — was reduced from 
$35 billion in 1981 to just $5 billion in 
1983. In the same period, the combined 
trade accounts of these countries jumped 
from a surplus of less than $1 billion to 
a surplus of over $31 billion. 

Over $70 billion in Latin American 
external debt has been rescheduled to 
permit orderly servicing. Mexico's im- 
pressive improvement enabled it to sign 
a multiyear agreement in September 
with its commercial bank advisory com- 
mittee to reschedule payment on almost 
$50 billion of public sector debt. Ven- 
ezuela has worked out a similar agree- 
ment, and Brazil will enter negotiations 
shortly. Both Mexico and Brazil should 
record positive growth this year. 

Finally, last weekend Argentina and 
its major creditor banks reached agree- 
ment on a new financial package. 
Assuming the agreement is acceptable 
to all its creditor banks, Argentina will 
receive $4.2 billion in new money from 
the banks over the period of its adjust- 
ment program with the IMF. In addi- 
tion, $13.4 billion in 1982-85 maturities 
will be rescheduled at reduced spreads 
from a 1982-83 rescheduling agreement. 
The U.S. Treasury has agreed to pro- 
vide $500 million in short-term bridge 
financing to Argentina once the bulk of 
the new bank money has been made 
available. Argentina thus joins the ranks 
of the major debtor countries who are 
pursuing effective stabilization policies 
and normalizing relations with their 

'Entering a New Phase: Growth 

We are thus entering a new phase. The 
focus of our attention is shifting from 
ensuring immediate liquidity to pro- 
moting long-term growth. Without 
renewed real growth, debtor nations will 
lurch from one short-term crisis to 

For a generation, from the late 
1950s to the late 1970s, Latin America 
as a whole grew by 6% a year in real 

February 1985 




:■■■■■■'■ -y. 


terms. But since the debt crisis erupted 
in 1982, and despite near- term successes 
in some countries, aggregate growth has 
been negative. Per capita income has 
fallen to roughly 1976 levels. Industrial 
sector unemployment, seldom a problem 
in the past, has become serious. Popula- 
tion continues to grow at about 2% a 
year, and entrants to the job market are 
increasing at about 3% a year. 

As a creditor country, we often 
think in terms of the repayment of 
debts, hence the label "debt crisis." 
Behind this crisis, however, is the failure 
of most Latin American economies to 
generate the resources for the growth 
their societies require. How to meet 
popular expectations for jobs, for serv- 
ices, for education, for improved stand- 
ards of living— that is the underlying 
problem throughout Latin America. And 
that is why in this new phase we should 
be thinking growth, not just debt. 

Internal Tradeoffs 

Achieving sustained economic growth 
presents different challenges from those 
posed by balance-of-payments problems. 
Austerity programs and belt-tightening 
measures can be sold politically as short- 
term necessities. Sustainable growth, in 
contrast, requires far more fundamental 
economic and political changes. 

The changes required to renew and 
sustain growth are often referred to 
under the heading of "structural adjust- 
ment." These changes involve permanent 
shifts in income distribution, resource 
allocation, and political power— often 
between city and countryside, labor and 
management, consumers and exporters. 
Adjustment involves decisions on sub- 
sidies, on exchange rates, on state enter- 
prise, on private enterprise— in short, on 
the way economic activity is organized 
in a particular country. These decisions 
are almost always painful. And they can- 
not be taken by outsiders. 

The choice for debtor countries is 
not between adjustment today or adjust- 
ment tomorrow. It is between orderly 
adjustment— cushioned by external sup- 
port—and disorderly adjustment forced 

eonomic decline and attempts to sus- 
tain ineffective policies. 

The Latin American experience is 
currently marked by the social and 
political -train:- associated with the ad- 
justment measures needed to renew 

The Peruvian Government, for ex- 
ample, has reached successive agree- 
ith the IMF to take steps that, 

nplemented, would enable it to 

stabilize its economy and resume orderly 
servicing of its $13-billion debt. But 
these steps have aroused intense opposi- 
tion from political parties, labor, 
business and interest groups. A nation- 
wide general strike was widely effective 
in March. And without effective adjust- 
ment, both the economic and political 
situations have continued to deteriorate, 
eroding further the ability of the govern- 
ment to take decisive action. Meanwhile, 
particularly brutal guerrilla agitation 
and violence are corroding national con- 
fidence. These developments challenge 
Peru's Government, which was restored 
to civilian democratic control only in 

Peru's problems are not unique. 

In the Dominican Republic last 
April, efforts to reduce food subsidies 
that the government could no longer af- 
ford to pay led to riots that left 60 dead. 
Only careful, patient leadership in the 
wake of those riots has restored the 
government's ability to conduct eco- 
nomic policy and implement reforms. 

In Bolivia this spring, labor groups 
frustrated attempts at economic reform 
by striking and closing the Central 
Bank. Since then, the economy has 
greatly deteriorated, with inflation 
reaching almost 1,500%. The Bolivian 
Catholic Church recently warned that 
democracy was endangered. Civilian 
President Siles responded with a signifi- 
cant gesture, cutting his mandate short 
by 1 year and promising elections in 
June of 1985. 

In Ecuador, the democratically 
elected, reform-minded administration 
of President Febres Cordero faces a 
tough political challenge in putting his 
economic program through a skeptical 

In Honduras and El Salvador, new- 
ly developing democratic institutions 
must cope not only with economic dif- 
ficulties but with immediate security 
problems as well. 

External Support 

Each country must make the tough deci- 
sions on how to stabilize and restructure 
its economy. The international communi- 
ty can help in this effort and can cushion 
the impact of reforms. But domestic ad- 
justment must come first, because inter- 
national help will fail without it. 

Three factors, in particular, can help 
ease the adjustment process: IMF/World 
Bank efforts to promote growth, in- 
creased investment in the debtor coun- 
tries, and more open trade. I should like 
to touch briefly on each of these factors 
in turn. 

IMF/World Bank Efforts. In the 

short term, the United States can 
sometimes provide bilateral assistance to 
cushion the shock of adjustment while 
ensuring that adjustment takes place. 
We are, for example, giving economic 
aid to each of the countries I have just 
named. However, it is also essential that 
multilateral institutions — such as the In- 
ternational Monetary Fund, the World 
Bank, and the Inter-American Develop- 
ment Bank — assist debtor countries by 
providing resources and policy advice. 

The purpose of IMF programs, ac- 
cording to the Fund's managing direc- 
tor, is "to achieve a better balance of 
payments equilibrium and thus open the 
way for more vigorous and lasting 
growth [in debtor countries]." Conse- 
quently, IMF programs seek both "a 
better balance-of-payments equilibrium 
in the medium term and a more effi- 
cient use of scarce resources by intro- 
ducing . . . incentives ... to generate 
more domestic savings, more invest- 
ment, and more exports." The United 
States supports this emphasis on growth 
and structural adjustment. 

IMF efforts are complemented by 
those of the World Bank. The bank's 
structural adjustment loan program, for 
example, is designed to facilitate the 
sort of long-term economic changes I 
described earlier: changes to make ex- 
ports more competitive, to mobilize 
domestic and foreign capital, to promote 
a more efficient use of domestic re- 
sources, and to bring about institutional 
reforms. These loans, together with the 
Bank's sectoral and project lending, can 
help developing countries carry out 
reforms at a time when slow growth and 
tight credit make such reforms as dif- 
ficult as they are necessary. 

Investment. Restoring vigorous and 
sustainable growth to the hemisphere 
will require continued infusions of 
capital for years to come. Official 
assistance levels, whether from bilateral 
or multilateral sources, are unlikely to 
rise much in the years ahead. It is also 
clear that private lending at the levels 
that prevailed in the 1970s is not in the 
interest of the banks or the borrowers. 
The capital required to sustain new 
growth will have to come from some- 
where else. 

Domestic savings must be a primary 
source of new investment. Adequate in- 
centives—such as positive real interest 
rates— must be provided to encourage 
such savings. Priority should also be 
given to creating the right conditions for 
repatriation of the flight capital of the 


Department of State Bulletin 


past decade. From L979 to L983, some 
$100 billion— ] repeat, roughly $100 

billion— was transferred out of Latin 
American countries. That money could 
have been used to generate income to 
service debt Its absence means that 
local savings must be tapped to service 
debt rather than to stimulate economic 
growth. The volume of capital flight has 
fallen slightly in the past year but re- 
mains a major problem. 

Foreign direct investment is another 
important potential source of capital. As 
an alternative to acquiring new debt, 
foreign direct investment has many ad- 
vantages. In hard times, the costs of in- 
vestment, serviced by profits, are lower 
than the costs of debt capital, serviced 
by interest payments. Moreover, foreign 
direct investment develops human re- 
sources through training and education, 
provides access to new technology, and 
often generates its own international ex- 
port markets. 

The problem is that Latin America 
and the Caribbean have not been suc- 
cessful recently in competing for foreign 
direct investment. External and internal 
factors have combined to cause a pro- 
nounced dropoff in investment flows. 
For five major Latin American countries 
(Brazil, Mexico, Chile, Peru, and Co- 
lombia), net inflows during 1983 were 
$2.7 billion less than the 1979-82 
average. And despite Mexico's recent 
financial successes, foreign investment 
flows to Mexico remain at a fraction of 
precrisis levels. Meanwhile, the Far East 
has seen foreign investment rise. And 
the United States, which offers excellent 
security and good yields, is proving ex- 
tremely attractive to investors, including 
many from Latin America. 

It will take political courage and 
determination for Latin American coun- 
tries to compete more effectively for 
foreign investment. Both internal ad- 
justments and international cooperation 
will be essential. Owners of capital need 
to earn a fair, risk-adjusted rate of 
return. They will not be attracted by 
restrictive rules enforced by government 
bureaucracies with little understanding 
of production or marketing require- 
ments. Remedies in these areas would 
also curb capital flight and stimulate 
local savings. 

Open Trade. Trade is as vital to 
growth as it has been to the easing of 
immediate liquidity problems. The 
Inited States has contributed decisively 
to improved Latin American trade ac- 
counts. We have kept our markets 
open— even when those countries were 
forced to cut their imports from the 

February 1985 

United States and elsewhere. According- 
ly, Latin American exports to the 
United States grew by over $4 billion 
from 1982 to 1983, while they decreased 
to the rest of the world. In 1984, we ex- 
pect to take almost half of all Latin 
American exports ($50 billion out of 
$111 billion). 

These figures belie the notion that 
the United States is "protectionist." Our 
projected $130-billion merchandise trade 
deficit is evidence that we have kept our 
markets open, thus helping our Latin 
American trading partners to grow with 
our own economic expansion. However, 
if trade is to foster sustained growth, it 
must be a two-way street. We anticipate 
that renewed Latin American economic 
growth will lead to increased purchases 
by them of our goods and services. And 
we hope that individual Latin American 
countries will reduce their trade barriers 
and diversify their trade with others and 
among themselves as well. 

What's at Stake 

The "tradeoffs" between maintaining 
political and social stability today and 
building for growth tomorrow create 
awesome dilemmas for any government. 

The difficulties can be eased some- 
what if there is an alliance between the 
decisionmakers and the people whose 
fate is being decided. As President 
Monge of Costa Rica, speaking from ex- 
perience, told a European audience 5 
months ago: "Democracy works as a 
means of settling the problems of pro- 
duction and [winning] battles in the 
struggle against under-development and 

My talks in South America made me 
optimistic that President Monge is right. 
Men like Argentina's President Raul 
Alfonsin— a profoundly decent man try- 
ing to do what is right in a country still 
wracked by the misdeeds of the recent 
past— are now also working in demo- 
cratic systems. And this kind of thing is 
happening throughout the hemisphere. 

Counting just the past 4 years, our 
southern neighbors have cast more than 
150 million votes in 35 elections in 26 
countries. That is more people voting in 
more elections in more countries than 
ever before in the history of Latin 
America and the Caribbean. 

Over the past 5 years, elected 
civilian presidents have replaced military 
rulers in Argentina, Bolivia, Ecuador, El 
Salvador, Honduras, Panama, Peru, and 
soon in Uruguay as well. Additional 
countries as different as Brazil and 
Guatemala are now also moving toward 
greater democracy. The day before 

yesterday, the people of Grenada chose 
their leaders in a free and open election, 
restoring democracy on that island. 
More than 90% of the people of this 
region to our south now have govern- 
ments that are either democratic or 
heading there. 

But good political statistics cannot 
offset bad economics. The dictatorships 
were swept aside because they could not 
solve their nations' severe economic and 
social problems. Democratic govern- 
ments, if they are to survive, must now 
prove that they can deal successfully 
with these challenges. They must imple- 
ment adjustment measures and they 
must do so now, not later. If govern- 
ments delay— if adjustment measures 
are then forced upon them by circum- 
stances—there is a risk of triggering in- 
ternal violence and a return to the 
military dictatorships of the past. 

But that is not the only— or even the 
most probable— result. If the democratic 
governments fail, a whole range of alter- 
natives is possible, and not just Marxist- 
Leninist regimes mimicking Cuba and 
Nicaragua. We have already seen in the 
Garcia Meza regime that ruled Bolivia 
from 1980 to 1981 a government dom- 
inated by narcotics traffickers. And 
beyond that, consider the dangerous 
chaos that could ensue if nihilistic 
radicals like Peru's Sendero Luminoso 
(Shining Path) guerrillas multiplied their 

The stakes are enormous. Hanging 
in the balance is the well-being of the 
90% of Latin Americans now enjoying 
or moving toward democracy, as well as 
the security of the Western Hemisphere 

It is vital, then, that the Latin 
American governments directly at risk 
take today the actions necessary to build 
for sustained growth tomorrow. Fore- 
most among such actions are policy 
changes to open up their markets and 
create conditions to attract and retain 

The United States has supported— 
and will continue to support— such ac- 
tions. Other industrial countries— par- 
ticularly Japan and the European Com- 
munity — must also work to cushion the 
adverse impact of economic adjustment. 
This can be done by supporting the in- 
ternational financial system, keeping 
markets open, and exercising sensitivity 
along with fiscal responsibility. 

When all is said and done, I came 
back from South America both con- 
cerned by the odds and convinced that a 
new era of hemispheric cooperation, 
growth, and security is within our 
reach. ■ 





The Role of Investment 

in Latin America's Economic Future 

by J. William Middendorf II 

Address before the Torcuato di Telia 
Institute of Argentina in Buenos Aires 
on November 19, 1984. Ambassador Mid- 
dendorf is U.S. Permanent Representa- 
tive to the Organization of American 
States (OAS). 

It is a pleasure for me to be here with 
you today, since our discussion is a visi- 
ble example of the indomitable nature of 
democracy. I say this because, as U.S. 
Secretary of State George P. Shultz said 
at our recently concluded OAS General 
Assembly, democracy unites the people 
of the Americas more than anything can 
divide them. Democracy is becoming the 
primary bond in this hemisphere— both 
within nations and among them— 
precisely because it is a means of man- 
aging differences, of reconciling con- 
flicts, of building strength out of diversi- 
ty. We in the United States also believe 
that democracy could bring the New 
World's historic but, as yet, incomplete 
promise of freedom and plenty closer to 
fruition for all our citizens. 

In short, democracy is the only 
problem-resolving process that permits 
free competition of ideas and lets the 
marketplace— in this case, the polity- 
decide what the best solutions are. It is 
also the only process that, in the long 
run, can deal competently and justly 
with the "politics of economics." 

I am, therefore, optimistic about the 
future of the hemisphere, even though 
the challenges in the "politics of 
economics" are, indeed, daunting. 

The Next 15 Years 

According to an Inter-American 
Development Bank study, between now 
and the year 2000, Latin America and 
the Caribbean will have to create 100 
million new jobs, all other things being 
equal. The average cost for creating one 
new job in the region is $12,500. Simple 
arithmetic tells me that somehow $1.25 
trillion in capital will have to be 

These numbers are difficult enough 
to face by themselves but become even 
more sobering in the context of the pres- 
enl international economic environment, 
h is characterized by a difficult-to- 

manage debt structure and low prices 
for traditional exports and politically ex- 
pedient but economically counterproduc- 
tive fiscal, monetary, and statist invest- 
ment policies found not only in our own 
hemisphere but also in other parts of the 
world. The effect of such policies is quite 
clear— high rates of inflation, low pro- 
ductivity, and capital flight. 

If nations do not move to adjust 
their economies to current conditions, 
they face the risk of recreating the con- 
ditions reflected in the old Moscow 
workers' joke, "We pretend to work, and 
they pretend to pay us." The second part 
of the joke may already exist in a few 
countries in the region in the form of 
high inflation caused, in large part, by 
governments' propensity to print money 
faster than the economy can grow. 
Under conditions of high inflation 
caused by undue monetary growth- 
combined with relatively high levels of 
government ownership of enterprises- 
asking for and receiving higher wages is 
not a solution but, rather, an illusion. 
Under such conditions, money can no 
longer serve as a measuring device for a 
transaction's economic value. But the 
pernicious effects of inflation go much 
further. For the business planner and in- 
vestor, it becomes very difficult to make 
sound decisions having longer range im- 

Since most countries and firms 
adhere to "historical accounting" prac- 
tices, a highly inflationary environment 
results in a progressive decapitalization 
of the firm, since profits tend to be 
overstated while replacement costs tend 
to be understated. 

The Reagan Administration 
understood the negative effect of infla- 
tion and made combating inflation one 
of its top priorities from the 
outset— and the policies have worked. 
The United States now has one of the 
lowest inflation rates in the world. What 
is perhaps not as well understood is that 
inflation is a real issue for the work 
force, and that is partly a function of 
vocabulary. My good friend, Con- 
gressman Jack Kemp, put the issue this 
way in a conference on supply-side 
economics on March 17, 1982: "Honest 
money is a populist, blue-collar, middle- 
class, bread-and-butter concern." Con- 
gressman Kemp gave a concrete exam- 
ple of what he meant, which I would like 
to quote: 

In my home state of New York, the Pro- 
fessional Employees Federation recently pro- 
posed this contract language in its negotia- 
tions with the state: "Recognizing the 
possibility of uncontrollable inflation and the 
serious loss of credibility and purchasing 
power of the dollar, the employer, upon 
union's demand, will remunerate employees 
in mediums of exchange other than the 
presently used U.S. Federal Reserve dollar. 
Such alternative mediums of exchange in- 
clude, but are not limited to, gold, silver, 
platinum, bullion and coin, and/or one or 
more foreign currencies." 

Economic Growth and the 
Private Sector 

The present economic environment in 
much of our hemisphere is characterized 
by recession and the tensions— both 
political and social— which have accom- 
panied the implementation of adjustment 
programs. These circumstances are ex- 
acerbated by the official bias in favor of 
the public sector and a pattern of in- 
creasing government encroachment. It is 
now becoming clear that private enter- 
prise in Latin America is in a fight for 
survival. I do not say this lightly but, 
rather, based on my having watched 
the development of the "politics of 
economics" in this hemisphere and 
elsewhere over the last 30 years. 

As I see it, during the last 30 years, 
government intervention in the 
economies of the less developed coun- 
tries—often buttressed by nationalist 
and/or socialist ideologies— has resulted 
in substantial increases in: 

• State ownership of economic ac- 
tivities in, for example, extractive in- 
dustries, manufacturing, financing, and 
international trade and commerce, far 
beyond the traditional limits of in- 

• Regulation of private economic ac- 
tivity via money, credit, and exchange 
controls, licensing systems, and price 
and wage controls; 

• The state's consumption share of 
gross national product; and 

• Government investment expen- 
diture—typically more than half of na- 
tional capital formation. 

It is unfortunate that the debate 
concerning private versus state invest- 
ment continues on philosophical and 
ideological grounds at a time when em- 
pirical economic research has conclusive- 
ly demonstrated that private enterprise 
is the most efficient means for achieving 
economic development. As Secretary of 
State George P. Shultz said in his 
November 12 statement to the 14th 
General Assembly of the Organization of 
American States: 


Department of State Bulletin 



If we are to put into practice what we 
proclaim about growth and equity and a bet- 
ter standard of living, we all have a respon- 
sibility to modify or discard stereotypes that 
arc no longer germane. Today, attracting 
both domestic ami foreign investment earj be 
a route to more freedom and independence 
rather than less. It is an essential part of any 
strategy for restoring growth. 

To cite just one example of such 
research, consider the February 1984 
IMF [International Monetary Fund] 
working paper entitled "Government 
Policy and Private Investment in 
Developing Countries," by Mario Blejer 
and Mohsin Khan. Their study con- 
firmed the central importance of private 
investment for both long-term develop- 
ment and for the design of short-term 
stabilization programs in less developed 

The first major finding is that 

countries with a higher proportion of 
private direct investment to total invest- 
ment tend to have a higher ratio of total 
investment to income. The good news is 
that government policies which give the 
private sector a greater role in invest- 
ment tend to have a higher ratio of total 
investment to income. The bad news is 
confirmation that the state-owned sector 
can crowd out private sector investment 
if it inefficiently claims scarce resources 
which would otherwise be available to a 
more efficient private sector or if its 
marketable products and services com- 
pete with those produced more efficient- 
ly privately. 

The second major finding is that 
countries with a larger proportion of 
private investment to total investment 
tend to have higher rates of economic 
growth. The two factors which seem to 
be critical in their effects on private in- 
vestment are the availability of financing 
and the level of state sector investment. 
Keith Marsden, in his 20-nation study, 
"Links Between Taxes and Economic 
Growth" (World Bank Staff Working 
Paper No. 605, August 1983), found that 
nations which provide their private sec- 
tor wider access to credit realize more 
rapid growth. In statistical terms, 
Marsden found that with an increase in 
the share of the private sector of 10%, 
the growth rate of gross domestic prod- 
uct increased by 0.41%. In considering 
the level of state sector investment, the 
quality of investment which comple- 
ments private enterprise can increase 
the demand for privately produced 
goods and services through greater de- 
mand for inputs and ancillary services 
and, thereby, augment the aggregate 
amount of available resources by 
expanding total production and savings. 

February 1985 

It is only this type of government invest- 
ment (in support of the private sector) 
which has the potential of canceling the 
crowding-out effect from other types of 
state investment. 

Economic Growth and Taxes 

In the study by Keith Marsden men- 
tioned earlier, he found significantly 
higher real rates of growth in gross 
domestic product among countries that 
placed a lower effective tax burden on 
their citizens. In the low-tax group of 
countries, the average annual growth 
rate of gross domestic product was 
7.3%, while it was only 1.1% for the 
high-tax group. As Professor Jerry Haar 
of Florida International University noted 
in a paper entitled "Private Investment, 
Taxes and Economic Growth": 

One finding which will be particularly 
discomforting to those possessing a socialist 
perspective on economics and social class is: 
higher rates of economic growth produced a 
significant increase in all classes' standard of 
living among low-tax countries. An expansion 
of the tax base (a result of a supply-side tax 
approach) was associated with growth and 
resulted in increased revenues, which fi- 
nanced a more rapid expansion of expen- 
ditures for health, social services, education, 
nutrition and defense. Most importantly, 
available data on income distribution refute 
the argument that high-tax countries possess 
a more equitable distribution than low-tax 
ones. [Emphasis added.] 

Two operative findings for the 
policymaker result from the research I 
have cited. 

First, lower taxes result in in- 
creased supplies of the factors of pro- 
duction and, thereby, increase total pro- 
duction by augmenting the after-tax 
return on savings, investment, work, 
and innovation. 

Second, low-tax countries, through 
fiscal incentives, have channeled their 
resources from less productive to more 
productive sectors, thus increasing 
economic efficiency. 

These operative findings, I would 
like to note, also are the foundation of 
President Reagan's economic policies 
and are undoubtedly among the key fac- 
tors for the extraordinary performance 
of the U.S. economy over the past 2 

Here I would like to digress for a 
moment to a topic to which I only 
alluded earlier. The various factors 
which I have discussed up to this point 
are merely symptoms of a much more 
fundamental factor which is widespread 
in our hemisphere— namely, the relative 
lack of depth in economic background 

and understanding, not only on the part 
of many politicians but also on the part 
of considerable segments of our bodies 
politic. I also think it is incumbent on all 
of us who are in the public eye to do 
everything we can to increase the level 
of understanding of our friends and 
neighbors in order to find acceptable 
and workable solutions to the economic 
problems of our hemisphere. 

The place to start, I suspect, is with 
the recognition that the concept of an 
economy as an interrelated set of in- 
stitutions, processes, incentives, and 
tendencies is inherently both complex 
and abstract, and, indeed, economic rela- 
tionships are often counterintuitive. 
Nowhere is this more clearly seen than 
in the concept of "price." Prices, in 
general, are widely viewed as normative, 
i.e., determined through a political proc- 
ess rather than as a variable of a certain 
market-clearing magnitude. But while 
laws passed by legislatures can certainly 
distort economies, they cannot invalidate 
the laws of economics. Human history 
shows us plenty of examples where in- 
tuition and science have been at log- 
gerheads — after all, the intuitive 
understanding is that the world is flat, 
not round, and discovery of our own 
hemisphere is largely due to Christopher 
Columbus' attempt to prove intuition 

A further point I would like to make 
is that quite often our language is too 
technical. Economists talk about infla- 
tion and Jack Kemp talks about "honest 
money" — which is more easily under- 
stood? We often talk about private sec- 
tor capital investment when the real bot- 
tom line is the creation of genuine jobs, 
i.e., jobs which create new wealth and, 
therefore, new jobs, in contrast with 
what is all too often the case with state- 
owned enterprises. 

State Enterprises 

In Latin America, state enterprises are 
omnipresent. I can do no better than to 
cite the contrast between the private 
and state-owned sectors by quoting 
Keith Marsden: 

The private sector tends to have more ex- 
perienced management, greater competitive 
stimulus, more entrepreneurial drive and 
stronger work incentives and motivations. 
Public enterprises are subject to tighter 
political constraints and pressures from sec- 
tional interest groups. They are also used for 
political patronage. They frequently set social 
objectives— such as preserving employment 
and restraining rises in the cost of living— 
which are difficult to reconcile with efficien- 
cy. They are rarely allowed to go out of 
business, even if their products and plants 



are obsolete and incurring huge losses. Red 
tape and excessive bureaucracy sometimes 
undermine the effectiveness of government 
services. And a large public sector often coin- 
cides with greater controls over private sec- 
tor decisions through licensing, rationing, and 
regulations. Such interventions tend to 
distort incentives and bring about a misuse or 
misallocation of resources in the economy as 
a whole. 

What has been happening is clearly 
seen in Mexico, where, according to 
trend data, there were only 84 govern- 
ment enterprises in 1972. By 1982, there 
were 760. During the same period, total 
government spending as a percentage of 
gross national product increased from 
23% to 46%. By 1982, virtually all of 
Mexico's major industries were under 
government control, and the govern- 
ment's share of total capital formation 
had reached 45%. Even in Brazil— where 
in 1979 President Figueiredo created a 
special ministry with the objectives of 
(1) selling government-owned enter- 
prises to the private sector where feasi- 
ble, (2) restricting the indiscriminate 
growth of state-owned enterprises, and 
(3) strengthening the free enterprise 
system— little progress has been made, 
and the spending of government and its 
companies approaches 50% of the gross 
domestic product. Moreover, 1 am also 
afraid that the unfortunate correlation 
between those countries experiencing 
debt problems and excessive government 
involvement in their economies is not en- 
tirely accidental. I think when President 
Belisario Betancur of Colombia recently 
said that what Colombians wanted were 
partners not creditors, he was recogniz- 
ing the correlation. 

In a paper entitled "Public Ad- 
ministration and Economic Develop- 
ment," Dr. Goh Keng Swee, First Depu- 
ty Prime Minister and Minister of 
Education in Singapore, analyzed the 
common policy mistakes which are often 
made in the quest for developed country 
status. Dr. Swee discusses the lessons to 
be learned from Japan: 

What was accomplished in the first two 
decades [following the Meiji Restoration in 
1868] was meagre. The government, like 
developing countries do today, did establish 
manufacturing industries, but most of these 
failed and after 12 years they were sold at a 

This result is not surprising since, as 
Aristotle said, "Men pay most attention 
to what is their own." And it follows 
that if ownership is vested in the 
state— an abstract entity— employees 
will not paj as much attention to the 
. i sful development. In 
arena, nothing more 

clarifies the mind than the risk of per- 
sonal loss and joy of personal gain. 

But while it is relatively easy to 
diagnose the ills resulting from excessive 
governmental involvement in our 
economies, it is far more difficult to find 
constructive solutions. In many of the 
countries of our hemisphere, the state- 
owned sector is so large relative to the 
domestically owned pool of private 
capital that a simple sale to the private 
sector would be difficult, indeed, and at- 
tracting foreign capital for this purpose 
also would be difficult, for well-known 
political reasons. 

However, I believe that there are 
potential and feasible solutions, for, as 
President Reagan has said, "Developing 
countries need to be encouraged to ex- 
periment with the growing variety of ar- 
rangements for profit sharing and ex- 
panded capital ownership that can bring 
economic betterment to their people." 
One such method of expanded capital 
ownership is advocated by Dr. Louis 0. 
Kelso and Patricia Hetter in their book, 
La Economia de los Dos Factores: Un 
Tercer Camino. The plan involves 
employee stock ownership plans, which 
are nothing less than having the 
employees of the corporation also 
become the stockholders, i.e., owners. 
There are now approximately 6,000 cor- 
porations in the United States using 
these plans, and the experience with 
them has been quite good— productivity 
goes up, worker income is linked to pro- 
fitability, etc. While they are only one 
form of expanded capital ownership, the 
point I am trying to make is that there 
are alternatives to state ownership, and 
they should be explored and adapted to 
the conditions existing in each of the 
countries of our hemisphere. 

Foreign Direct Investment 

Private foreign direct investment plays a 
key role in trade and commerce in our 
hemisphere. Indeed, it is a catalyst for 
economic development and for interna- 
tional economic integration through the 
world trading system, as well as being a 
vitally important source of capital, 
technology, and know-how. 

It seems intuitively obvious that the 
high debtor countries of our hemisphere 
should take strong steps to court foreign 
direct investment as the most attractive 
alternative to bank financing. Foreign 
direct investment has the advantage of 
not requiring fixed interest payments. 
Earnings are repatriated only if the in- 
vestment is profitable. Local enterprises 
are able to sell to multinational com- 
panies and often gain access to new 

markets and distribution channels both 
nationally and internationally. Finally, 
and most importantly, foreign direct in- 
vestment creates real jobs as opposed to 
state-funded, make-work jobs. 

In 1950, U.S. direct investment in 
Latin America accounted for nearly 50% 
of the total U.S. investment overseas. In 
1970, the stock of the U.S. direct invest- 
ment abroad amounted to $75.48 billion, 
of which 68.7% was in developed coun- 
tries; only 17.2% in Latin America; and 
3.0% in Asia and the Pacific. At the end 
of 1982, the stock of U.S. direct invest- 
ment abroad stood at $221,342 billion, of 
which 73.7% was in developed countries; 
14.9% in Latin America; and 5.6% in 
Asia and the Pacific. While the absolute 
size of U.S. investment has risen, it is 
also clear that in the competition among 
developing countries for this scarce 
capital, Latin America is beginning to 
lose its lead over Asian-Pacific countries. 
Investment-flow data confirm this, in 
that these flows declined for Latin 
America toward the end of the 1970s, 
except for Chile and Colombia. In this 
regard, it is clear that the international 
investment community is closely watch- 
ing the negotiations between IBM and 
Mexico. If there is a favorable outcome, 
it could signal a trend change in invest- 
ment flows. 

It is clear that domestic conditions 
conducive to investment, whether 
foreign or indigenous, are a key element 
which must be addressed if this trend is 
to be changed. I am encouraged by the 
increasing recognition of the importance 
of internal factors for the revitalization 
of Latin American economies now being 
found among prominent Latin Ameri- 
cans. Brazilian Senator and former Plan- 
ning and Finance Minister Roberto Cam- 
pos stated the issues succinctly in his 
speech, The New Demonology: "The 
United States has become the magnet 
for European and Japanese investors 
precisely because they have two things 
we lack— a strong currency and stable 
rules of the game." The prominent 
Argentine economist, Marcos Victorica, 
has also addressed these issues. Mr. Vic- 
torica estimates that Argentine capital 
abroad amounts to about $27 billion and 
that much of this capital left the country 
during the early 1980s when real in- 
terest rates in Argentina amounted to 
about 20%— double U.S. real interest 
rates— and he has ascribed these 
developments to a lack of confidence. 
Regarding policies affecting foreign 
direct investment, Mr. Victorica has 
noted one of the key difficulties: "No one 
will come in [to invest] where a way out 
is forbidden." Moreover, as the statistics 


Department of State Bulletin 


on Qight capital in Latin America (cited 
by Henry Wallich, member of the Board 
of Governors of the U.S. Federal 
Reserve System, and others) indicate, 
there is no genuine shortage o( Latin 
American capital— the problem is that 
the capital is not being- employed inside 
Latin America 

One o( the difficult impediments to 
foreign investment in Latin America has 
been the Calvo Doctrine. 1 Many coun- 
tries in the hemisphere incorporate the 
doctrine and other restrictions in their 
constitutions, in other laws, or in 
multilateral agreements, such as the An- 
dean pact decision 24. 2 With regard to 
decision 24, 1 am pleased to note that 
there is increasing recognition on the 
part of member governments of the pact 
that such provisions are counter- 
productive. This was one of the principal 
causes for Chile's withdrawal from the 
pact in 1976. Moreover, we expect 
Ecuador to sign an agreement with the 
Overseas Private Investment Corpora- 
tion (OPIC) shortly which could pave the 
way for other pact countries to under- 
take similar steps and which might lead 
to a revision of negative provisions such 
as decision 24. 

In countries that subscribe to the 
Calvo Doctrine, there have been a large 
number of expropriations without fully 
satisfactory compensation. The investor 
has no right of recourse to his home 
government under international law 
unless he is denied fair access to na- 
tional courts and tribunals. This was a 
reaction to perceived abuses of protec- 
tion by the United States and European 
powers on behalf of their investors and 
traders in the last century. The contem- 
porary result is often the invalidity 
under national law of any choice of law 
or forum outside the national jurisdic- 

One negative consequence of such a 
policy is that potential U.S. investors 
are constrained from obtaining OPIC in- 
surance coverage because of require- 
ments limiting possible litigation to local 

The United States has long favored 
an open international investment sys- 
tem. A major U.S. goal in the 1980s is 
to reverse the trend toward govern- 
ment-induced distortions in the invest- 
ment process through international 
understandings and voluntary guidelines 
leading to a more open and less in- 
terventionist investment climate. 

As part of continuing efforts in this 
area, the U.S. delegation to the 14th an- 
nual General Assembly of the OAS in- 
troduced a resolution entitled "Pro- 
moting Economic Justice through 

Strengthening Private Direct and In- 
direct Investment in Latin America and 
the Caribbean." The operative part of 
the resolution reads as follows: 

To instruct the General Secretariat to 
conduct a study of requirements necessary 
for the creation of economic and regulatory 
environments conducive to attracting and 
fostering direct and indirect investment in 
the countries of Latin America and the Carib- 
bean. This study should identify the various 
private and official, multilateral and national 
agencies involved in the promotion of invest- 
ment while also considering and evaluating 
the growing variety of arrangements for 
profit sharing and expanded capital owner- 
ship now available for the promotion of 
economic justice with a view to identifying 
operational mechanisms and sources of fun- 
ding for cooperative efforts with said agen- 
cies that may be implemented in the 
framework of the OAS. 

While the resolution did not come to 
a formal vote, the U.S. delegation was 
able to secure agreement, as noted in 
the rapporteur's report, that these topics 
would be taken up by the Permanent 
Executive Committee of the Inter- 
American Economic and Social Commit- 
tee of the OAS in 1985. I view this 
agreement as a major achievement and 
a major step forward. 

The Administration has advanced 
the cause of private enterprise on two 
fronts in Latin America: the Caribbean 
Basin Initiative and bilateral investment 
treaties. Both provide important incen- 
tives for the private sector and should 
stimulate additional foreign investment 
in their areas. 

As you know, the key elements of 
the bilateral investment treaties are: 

• New and existing investment to 
be granted national treatment or most- 
favored-nation treatment, whichever is 
more favorable, but both sides are 
allowed to list exceptions to national 
treatment in specified sectors of 
economic activity; 

• Unrestricted transfer of capital, 
returns, compensation, and other 
payments into and out of the host coun- 
try; and 

• Dispute settlement procedures 
both for disputes between the host coun- 
try and a national or company of the 
other country and disputes arising be- 
tween the governments. 

While these treaties are reciprocal in 
their treatment and protection provi- 
sions, the major inducement for the 
developing country is the assurances 
such a treaty offers a foreign investor. 

Several countries have seen the 
wisdom of negotiating such agreements. 
In this hemisphere, we signed treaties 
with Panama in 1982 and with Haiti in 
December 1983. We are also very close 
to agreement with Costa Rica, and we 
have had negotiations with Honduras, 
El Salvador, the Dominican Republic, 
and Jamaica. 

While the treaties mentioned above 
are laudable achievements for the par- 
ties concerned, in all candor, much re- 
mains to be done for our hemisphere to 
realize its full economic potential. 
Bilateral investment treaties ought prob- 
ably to be viewed as the end of a rather 
lengthy process which begins with OPIC 
agreements, which could continue with 
an intermediate step involving memoran- 
da of understanding, such as the one be- 
tween the United States and Indonesia, 
and then end with clear enforceable 
rules governing foreign direct invest- 
ment as formulated in bilateral invest- 
ment treaties. 


I started my remarks today by saying 
that the challenges facing our 
hemisphere are, indeed, daunting. In 
facing up to these challenges, we all 
need to adopt the philosophy so ably ex- 
pressed by the former Governor of Puer- 
to Rico, Luis Ferre: we must be "revolu- 
tionary in ideas, liberal in objectives and 
conservative in methods." 

'The doctrine represents the views of a 
19th-century Argentine jurist who maintained 
that a foreign investor or businessman, by 
choosing to do business in a given country, 
subjects himself exclusively to the law and 
courts of that country. 

2 Decision 24 states that any foreign com- 
pany investing in Latin America must allow 
at least 51% of the stock of the subsidiary 
company to be held by local entities. ■ 

February 1985 



&I , v.v/ 


U.S., Cuba Resume Normal Migration 

DEC. 14, 1984 1 

As the result of several years of efforts 
in a series of intensive discussions, the 
United States was able to reach agree- 
ment with Cuba today on the return to 
Cuba of approximately 2,700 who came 
to the United States in the Mariel 
boatlift of 1980. Representatives of the 
Department of State and the Immigra- 
tion and Naturalization Service (INS) of 
the Department of Justice participated 
in these discussions. 

Those persons to be returned to 
Cuba are ineligible to remain in the 
United States because they admitted to 
committing serious crimes in Cuba, have 
committed serious crimes in the United 
States, or suffer from severe mental 
disorders. It was agreed that these per- 
sons will be returned in a phased and 
orderly manner. 

I would like to point out that those 
who will be returned represent today 
only a very small percentage of the per- 
sons who came to the United States in 
the Mariel boatlift. The vast majority of 
these 129,000 persons have incorporated 
themselves into American life and are 
now being processed by INS under the 
Cuban Adjustment Act of 1966 for legal 
resident status. 

Cuba's agreement to accept the 
return of those individuals removes an 
impediment under U.S. law and permits 
us to resume normal processing of visas 
for Cuban applicants, as had been the 
case in Havana prior to 1980. Processing 
of all immigrant visas, other than for 
immediate relatives of U.S. citizens, and 
processing of refugee applications have 
been suspended since 1980 because of 
Cuba's refusal to accept the return of 
persons whom the United States has 
declared excludable. Under the refugee 
program, expolitical prisoners in Cuba 
will be eligible to apply to come to the 
United States under established U.S. 
procedures. We cannot predict how 
many Cubans will apply for entry into 
the United States, but I would reem- 
phasize that both those returning to 
Cuba and those applying to come to the 
United States will be handled in a 
phased and orderly process. 

'I he talk were limited only to 
migration matters. Moreover, the con- 
(rf ail agreement on this issue 
not signal any change in U.S. 

policy toward Cuba. That policy reflects 
our serious concern about Cuba's inter- 
national behavior. We see no evidence 
that Cuba is prepared to change that 

DEC. 14, 1984 

As announced on December 14, 1984, 
the United States and Cuba have con- 
cluded an agreement which provides the 
basis for the resumption of normal im- 
migrant visas processing in Havana. 
This will include the issuance of 
preference immigrant visas to all eligible 
Cuban citizens, up to the 20,000 annual 
limit established by U.S. law. Since May 
1980, immigrant visas in Cuba have 
been issued only to the spouses, parents, 
and unmarried minor children of U.S. 
citizens. With the restoration of normal 
visa processing, the following additional 
categories of persons set forth in U.S. 
law may now apply for immigrant visas 
in Cuba: 

• The sons and daughters (over age 
21) of U.S. citizens, regardless of 
marital status; 

• Brothers and sisters of U.S. 

• Spouses and unmarried sons and 
daughters of legal permanent residents 
of the United States; 

• Highly skilled members of the pro- 
fessions, including the arts and sciences, 
with prearranged employment in the 
United States; and 

• Certain skilled and unskilled 
workers with prearranged employment 
in the United States who receive a labor 
certification from the U.S. Department 
of Labor. 

The United States will also process 
applications for admission to the United 
States of persons who have been im- 
prisoned for what the Cuban Penal Code 
describes as "crimes against the security 
of the state." These persons are ex- 
political prisoners. 

Restoration of normal visa issuance 
is subject to the necessary administra- 
tive preparations, and an initial delay is 

The Consular Section of the U.S. In- 
terests Section in the Embassy of 
Switzerland in Havana will communicate 
in writing with those persons who are 
currently registered at the Interests 
Section as intending immigrants. This 

registration consists of petitions filed in 
the United States and approved by the 
U.S. Immigration and Naturalization 
Service. Since the Interests Section has 
nearly 15,000 Cuban citizens already 
registered, it will take several months 
for notification to be completed. All per- 
sons concerned are urged not to 
telephone or visit the U.S. Interests Sec- 
tion to inquire about individual cases. 
U.S. administrative arrangements re- 
quire that all such communication be by 
mail. Inquiries by telephone or in person 
can only result in delays for all. 

Those persons who believe they are 
registered for immigration, but who 
have not received a letter from the U.S. 
Interests Section by June 30, 1985, 
should write to the Consular Section of 
the U.S. Interests Section. They should 
include their full name, date and place of 
birth, and information about the original 
notice of registration as an intending im- 
migrant, including date. No original 
documents should be submitted. The 
Consular Section will respond only by 
mail. Observance of these procedures 
will ensure an expeditious reply to all in- 

U.S. citizens and legal permanent 
residents of the United States who wish 
to file a petition on behalf of a Cuban 
citizen relative should write to the 
nearest office of the U.S. Immigration 
and Naturalization Service. 

Processing applications for im- 
migrant visas involves several steps, 
such as administrative processing, the 
collection by the applicant of documents 
required by U.S. law, a physical ex- 
amination, and an immigrant visa inter- 
view. The applicants generally processed 
first are those who were registered first. 
Registration, however, does not 
guarantee a visa, and persons who 
receive letters confirming their registra- 
tion should not take any irreversible ac- 
tions, such as quitting jobs, prior to be- 
ing issued an immigrant visa. 

All requests for information about 
immigration to the United States should 
be made in writing to the Consular Sec- 
tion of the U.S. Interests Section in the 
Embassy of Switzerland in Havana. 
Again it should be noted that the Con- 
sular Section will respond to inquiries 
only by mail. Those persons in the 
United States requiring information 
about immigration should write to the 
U.S. Immigration and Naturalization 

The U.S. Government will also 
resume the processing in Havana, under 
its refugee resettlement program, of 
former political prisioners who were 


Department of State Bulletin 


charged under the Cuban Penal Code of 
"crimes against the security of t In- 
state." Also eligible for consideration 
would be the applicant's spouse, parents, 
unmarried children under the age of 21, 
and, as appropriate, other family 
members who live with him under his 
protection and custody. The U.S. In- 
terests Section will process applications 
on a numerically limited basis set by the 
President in consultation with the U.S. 
Congress as part of the annual regional 
refugee admission ceilings. 

Persons sentenced under the Cuban 
Penal Code for "crimes against the 
security of the state" who believe they 
might be eligible, should write to the 
Chief of the Consular Section, U.S. In- 
terests Section, Embassy of 
Switzerland, Havana, regardless of 
whether they have made past applica- 
tions. Copies of the court records in- 
volved in the applicant's sentence for 
"crimes against the security of the 
state," as well as marriage and birth 
records, should be submitted with the 
application. No original documents 
should be submitted. After the written 
application has been considered, the 
U.S. Interests Section will advise the ap- 
plicant concerning the need for addi- 
tional information or an interview. Ap- 
plicants who appear eligible under U.S. 
law will be interviewed by U.S. Im- 
migration and Naturalization Service in- 
spectors during periodic visits to 

DEC. 14, 1984 

Discussions between representatives of the 
United States of America and of the Republic 
of Cuba on immigration matters concluded to- 
day with the adoption of agreements for the 
normalization of immigration procedures be- 
tween the two countries and to put an end to 
the abnormal situation which has existed 
since 1980. 

The United States will resume issuance of 
preference immigrant visas to Cuban na- 
tionals residing in Cuba up to the number of 
20,000 each year, in particular to close family 
relatives of United States citizens and of 
Cuban permanent residents in the United 

The United States side expressed its will- 
ingness to implement — with the cooperation 
of the Cuban authorities — all necessary 
measures to ensure that Cuban nationals 
residing in Cuba wishing to emigrate to the 
United States and who qualify under United 
States law to receive immigrant visas, may 
enter the United States, taking maximum ad- 
vantage of the number of up to 20,000 im- 
migrants per year. 

For its part, the United States will con- 
tinue granting immigrant visas to residents 
of Cuba who are parents, spouses and unmar- 
ried children under 21 years of age, of United 
States citizens. These immigrants will not be 
counted against the annual limit indicated 


Cuba will accept the return of those 
Cubans nationals who came to the United 
States in L980 via the port of Mariel and who 
have been declared ineligible to enter the 
United States legally. The number of such 
persons is 2,746 and their names appear on 
an approved list. The return of these persons 
will be carried out by means of an orderly 
program of returns with the cooperation of 
the immigration authorities of both countries. 
The returns will proceed in a phased and 
orderly manner until all the identified in- 
dividuals who appear on the approved list 
have been returned. The returns will be ef- 
fected at a rate of 100 each calendar month, 
but if the figure of 100 is not met in a given 
month, the remaining numbers may be used 
in subsequent months, provided that no more 
than 150 will be returned in any calendar 
month. The United States stated that 
measures were being taken so that the Cuban 
nationals who came to the United States in 
1980 via the port of Mariel may acquire, 
beginning now and with retroactive effect of 
approximately 30 months, legal status as per- 
manent residents of the United States. 

Both delegations expressed their concern 
in regard to the situation of those persons 
who, having been released after serving 
sentences for acts which Cuban penal legisla- 
tion defines as "Offenses against the Security 
of the State," wish to reside permanently in 
the United States. The United States will 
facilitate the admission of such persons and 
their immediate family members by means of 
a program to be carried out under applicable 
United States law. The United States delega- 
tion stated that to this end the necessary 
steps have been taken for admission during 
Fiscal Year 1985 of up to 3,000 such persons, 
including immediate family members. The 
size of the program and any possible increase 
in subsequent fiscal years will be determined 
in the light of experience with the process 
and the desire expressed by both parties to 
carry out this program in such a way as to 
allow its ongoing implementation until fully 
completed in the shortest possible time. 

The representatives of the United States 
of America and of the Republic of Cuba 
decided to meet again within six months in 
order to analyze progress in the implementa- 
tion of these agreements. 

DEC. 14, 1984 

In regard to the discussions on immigration 
matters which concluded today, the repre- 
sentatives of the United States of America 
and of the Republic of Cuba reached the 
following agreements on the implementation 
of certain points dealt with in the Communi- 
que announcing the results of these talks: 

Concerning the return of Cuban nationals 
who came to the United States in 1980 via 
the port of Mariel and who have been iden- 
tified by the United States as persons ineligi- 
ble to enter the United States legally, it was 
agreed that the returns would begin no 
earlier than 30 days from today. The United 
States immigration authorities will give the 
Cuban authorities in advance of the actual 
return of any person all available health in- 
formation, including any available medical 
records, diagnoses and recommendations for 
treatment. Both authorities will cooperate 
closely to assure that appropriate measures 
are taken to protect both the health of the in- 
dividual and the public health. 

With regard to persons charged with 
committing crimes in the United States, the 
United States will furnish a certified descrip- 
tion, based on United States records, of the 
offense or offenses committed, the cir- 
cumstances under which such offenses were 
committed, the nature of the evidence sup- 
porting the charges, the time the person was 
held in detention and the status of judicial 
proceedings, including the sentence imposed, 
if any. 

Likewise, the United States will provide 
a certified copy of the applicable federal or 
state law establishing the offense. These 
documents will be provided as soon as possi- 
ble and in no case later than 30 days prior to 
the date on which the person is to be re- 
turned to Cuba, allowing the Cuban 
authorities to analyze the criminal records of 
those who committed an offense during their 
stay in the United States and who are to be 
returned by the United States authorities. 
The United States immigration authorities 
will notify the Cuban immigration authorities, 
no less than 10 days prior to a return, of the 
registration number of the aircraft to be used 
to transport persons to Cuba, of the names of 
the individuals aboard such flights, and of the 
measures for inflight custody. 

If, at the point of entry in Cuba, errors 
are detected which both parties agree negate 
the identification of a person being returned 
as a Cuban national who left Cuba via Mariel 
in 1980, that person will be returned to the 
United States pending further efforts to iden- 
tify him. 

The definition of "Offenses against the 
Security of the State" is understood to in- 
clude former prisoners convicted of the of- 
fense of illegal departure from the country 
which, at the time the offense was com- 
mitted, was defined by applicable criminal 
law as falling within that definition. 

February 1985 



The former prisoner who emigrates to 
the United States may be accompanied by his 
parents, unmarried children under 21 years 
of age and spouse and, as appropriate, other 
family members who live with him under his 
protection or custody. 

In order to facilitate the ongoing and 
uninterrupted implementation of the program 
for the normal issuance of immigrant visas 
and the program for former prisoners, the 
Government of Cuba will furnish to ap- 
plicants for entry into the United States the 
necessary documents in accordance with 
United States law such as certified copies of 
vital statistics registry extracts (birth, mar- 
riage and death certificates), divorce decree, 
as well as penal records, and will facilitate to 
the extent possible the conduct of medical ex- 
aminations including provisions of chest 

The United States Interests Section will 
continue to employ measures which are con- 
ducive to the orderly processing of persons 
applying to go to the United States, including 
the continued use of applications by mail. 

The normal processing of immigrant visas 
and the processing of applications for the 
program for former prisoners will require the 
assignment of 10 additional United States of- 
ficials to the United States Interests Section 
of the Embassy of Switzerland in Havana. 
The Cuban Government agreed to authorize 
these increases, on the understanding that 
these officers will be assigned temporarily 
and will not be considered permanent staff of 
the United States Interests Section, and 
agreed to provide them with the necessary 
facilities for carrying out their functions. 

The representatives of the United States 
and Cuba agreed to meet within six months 
to analyze progress in implementation of 
these steps. 

The United States and Cuba 

'Text from Weekly Compilation of 
Presidential Documents of Dec. 17, 1984. 

by Kenneth N. Skoug, Jr. 

Address before the "Face-to-Face" 
program of the Carnegie Endowment for 
International Peace on December 1 7, 
1984.. Mr. Skoug is Director of the Office 
of Cuban Affairs. 

I appreciate very much the kind invita- 
tion of "Face-to-Face" to address you 
tonight on the subject of U.S. -Cuban 

A discussion of this subject appears 
timely at mid-passage of the Reagan Ad- 
ministration, a traditional time for stock- 
taking. It also comes 3 days after we 
completed an important agreement with 
Cuba on migration matters, about which 
I will say a few words later. 

In his study of European relations in 
the period between the two world wars, 
E.H. Carr divided students of interna- 
tional politics into two groups. He called 
them— I believe without pejorative in- 
tent—Utopians and realists. The Utopians 
he described as primarily composed of 
intellectuals prone to emphasize 
idealistic considerations. By contrast, he 
placed diplomats and bureaucrats in the 
realist camp and said they liked to quote 
Machiavelli and Bacon. 

To my knowledge Machiavelli never 
had much to say on the Cuban question. 
One of his more trenchant aphorisms for 
general reference, however, was that 
even enemies have "hidden bonds of in- 
terest." He was thinking in balance-of- 
power terms, counseling that one should 
not overly weaken a foe lest a third par- 
ty gain too much in the process. We 
might wish, however, to inquire what 
kind of hidden bonds might exist be- 
tween the United States and Cuba and 
whether they are conducive to positive 
or negative directions in our relation- 

Francis Bacon, who also passed in 
silence over the Cuban question, did 
recommend to his sovereign a policy of 
vigorous foreign involvement so that the 
domestic difficulties of the Stuart 
monarchy might be swallowed up in a 
wave of English patriotism. This con- 
cept, too, might have some relevance to 
the foreign policy of Cuba. 

U.S. policy toward Cuba is shaped 
primarily by our perception of Cuban 
conduct in international affairs. Despite 
its size, it acts in world affairs in both a 
political and a military sense as a major 

power, with a large and well-equipped 
armed force— second largest in Latin 
America— and a history of a quarter cen- 
tury of foreign engagement. The Cuban 
Armed Forces are relatively rich in com- 
bat experience, almost all of it far from 
Cuban shores. Almost alone among 
Latin American states, Cuba involves 
itself intensively with the affairs of 
every state and virtually every political 
movement in the hemisphere and many 
even beyond. Havana is not merely 
aware of other states, but it knows 
about them in depth. It has a policy for 
each of them and for the region. It is 
one of the few states in Latin America 
with a sense of mission for the region as 
a whole, as well as a policy for Africa. 
Surely there are few small states in 
modern history which have involved 
themselves voluntarily in so many and 
so disparate foreign policy questions, not 
as an object but as a subject. 

Under the leadership of the past 26 
years, Cuba has become a crusading 
country. This curious internationalism 
might well have the collateral effect of 
disarming or even coopting potential 
domestic critics, but it seems to stem 
from the fundamental sense of Havana's 
post- 1959 leadership that Cuba alone is 
much too small a place for so much zeal. 
Small wonder that Fidel Castro told a 
recent visitor he regretted that Cuba 
does not have the natural resources of 
Brazil or an Argentina. But he has 
harnessed Cuba's impressive human 
resources to a foreign policy of engage- 
ment which is unique among small 

Cuba, of course, claims to be a 
developing country. In recent meetings 
of the Council for Mutual Economic 
Assistance (CEMA), Cuba appeared in a 
role alongside Vietnam and Mongolia as 
the developing little brothers in a com- 
munity where even the more in- 
dustrialized brethren are not exactly 
success stories. In economic terms Cuba 
today is clearly properly classified as 
underdeveloped. But Cuba has and has 
had for a long time very high standards 
of health, sanitation, and education and 
had living standards in 1959 that rivaled 
some West European countries. 

Dealing with Cubans, whether ex- 
patriates or nationals, one has the sense 
that while Cuba is now in an economic 
sense a developing country, in many 
other respects it remains an advanced 
society. Cuba was in 1959, in many 


Department of State Bulletin 


respects, highly advanced. It has become 
paralyzed economically by mismanage- 
ment ami particularly by a long-term 
commitment to produce sugar, a com- 
modity decreasingly in demand on world 
markets and intended for a special 
market which can pay Cuba only in 

Cuba's place in international affairs 
seems shaped by three sets of associa- 
tions. It would serve no purpose to lose 
sight of these underlying realities. The 
first and most critical is Cuba's special 
relationship with the Soviet Union. The 
second is its own revolutionary im- 
perative, which stands apart from and is 
older than its ties to Moscow. The third 
is its self-image as a protagonist for a 
regional bloc in the hemisphere— 
"Nuestra America" in the much ex- 
ploited term of Jose Marti— which 
would, to the extent possible, exclude 
the participation and influence of the 
United States. Through all three of 
these associations flows a strong hostili- 
ty to the United States on the part of 
the Cuban leadership and a perceived 
need to be a leader of the so-called 
nonaligned in a way which is supportive 
of the Soviet Union and opposed to the 
United States. 

Cuba's Distant Friend 

The Soviet-Cuban symbiosis owes its 
origin to Fidel Castro's assessment that 
his domestic and foreign policy would 
alienate Cuba's powerful neighbor, but 
that while Cuba's enemy was near, the 
enemy's own nemesis could redress the 
balance. While they may have since 
become close ideological kinsmen, for 
Cuba the U.S.S.R. was first and 
foremost a guarantor behind whose pro- 
tection Havana felt secure in pursuing 
with relative impunity the radical 
transformation of Cuban society and the 
foreign policy mission which its own 
leadership was determined to carry out. 
Moscow was also from the outset a 
vital source of economic aid without 
whose help Cuba could not have taken 
the course that it did. For the U.S.S.R., 
Cuba represented a windfall opportunity 
to introduce Soviet power and influence 
into the Western Hemisphere and to 
oblige the United States to address itself 
much more than in the recent past to 
the security of its own region. The new 
accord between Moscow and Havana 
also substantially increased the likeli- 
hood that future revolutions in the 
region would take on an East- West col- 
oration, whatever their roots. Revolu- 

tionary Cuba thus provided the Soviet 
Union with a low-risk opportunity to 
alter the strategic balance. 

Without reviewing the historic 
vicissitudes of the Cuban-Soviet relation- 
ship, most of which are well known to 
this audience, it is important to note 
that the fundamental elements which 
gave it birth have in no way lost their 
relevance. If anything, the contrary is 
true. In the 1970s the burden of this 
relationship on the Soviet Union grew as 
Cuba's economic dependence increased, 
but so did the value due to Cuba's 
unique capacity to advance objectives 
shared or favored by Moscow in Africa, 
Central America, and the Caribbean. 
The Cuban linchpin became more expen- 
sive, but it was still a bargain for 
Moscow. There is no sign that the Soviet 
Union is reassessing the value of Cuba 
or that the Cuban leadership has recon- 
sidered the utility it derives from close 
alignment with the U.S.S.R. 

Is Cuba a satellite or an ally? The 
Soviet Union has utilized its economic 
leverage over Cuba successfully in the 
past. The leverage is much stronger now 
due to the steady growth of Cuba's 
economic dependence, which in turn has 
come about through fundamental and 
probably irreversible economic decisions 
as well as the change in the terms of 
trade between the two countries. The 
enhanced value of oil and the shrunken 
outlook for sugar have given the 
transfer of commodities increasingly the 
character of aid. The Soviet Union now 
provides Cuba with the ruble equivalent 
of over $4 billion per year in assistance. 
But the recent summit meeting of the 
CEMA countries in Havana symbolized 
Cuba's status in that community and 
confirmed the island's economic future. 
No doubt as a matter of pride, Fidel 
Castro chafes at the notion of a subsidy, 
preferring to refer to the "just price" 
paid by the U.S.S.R. for Cuba's sugar, 
but he knows all the same that Moscow 
does not pay the same "just price" for 
Brazil's sugar, and he knows that with 
Moscow's largesse come strings of steel. 

While Cuba is increasingly depend- 
ent on the U.S.S.R. and subject to 
Moscow's manipulation, it would be er- 
roneous to regard it as merely a coerced 
Soviet satellite. In Eastern Europe there 
is an old joke which inquires why those 
states are always described as brothers 
of the U.S.S.R. and not merely as 
friends. The answer is that you get to 
choose your friends. Although Cuba is 
now a little brother in a family that has 
only one big brother, Havana did choose 
this connection. The Cuban leadership 

presently has a similar world view as 
does the U.S.S.R. It is true that Cuba 
asserts that it is a nonaligned state, a 
fiction that is as much in Moscow's in- 
terest to maintain as it is in Havana's, 
but the fact is that Cuba gives full sup- 
port to the Soviet Union in all major 
questions— whether it be the Soviet inva- 
sion of Afghanistan or any issue in the 
United Nations. The muscle which Cuba 
is able to apply in Third World forums is 
due not only to its own fervor but to the 
support of its strong friend, whom it 
terms the natural ally of the developing 
world. Cuba is, indeed, subject to Soviet 
pressure and control, but it does not 
have to be coerced to assail the United 
States at virtually every opportunity as 
the universal foe. 

Is there a hidden bond of interest in 
this? Cuba uses its hostility toward the 
United States to obtain a volume of 
assistance from the Soviet Union that 
Moscow gives to no other country. At 
the same time, though, Cuba is falling 
progessively further behind many Latin 
American countries whose standards it 
once surpassed. From Cuba's point of 
view, some redress could be obtained if 
the U.S. embargo were lifted. Since 
Moscow does not oppose Cuba's efforts 
in this direction, probably because the 
U.S.S.R. would welcome a little burden- 
sharing, Cuba could probably trade on a 
limited basis with the United States as it 
now does with some Western countries, 
without offending Moscow. What it 
could not do and still retain Moscow's 
favor, however, is alter its fundamental 
commitment to give unswerving support 
to Soviet policy. 

In this context it is sometimes sug- 
gested that the successful Nixon- 
Kissinger initiative toward China could 
be emulated with respect to Cuba by 
another conservative administration in 
the United States. This comparison, like 
similar ones suggesting that Cuba could 
become a Caribbean Yugoslavia, 
overlooks the underlying geopolitical 
reality as perceived by those who seized 
power in Cuba 26 years ago. In the case 
of China, it had expressed substantial 
concern long before 1968 for its security 
from a nearby and none-too-friendly 
Soviet Union. The invasion of 
Czechoslovakia, which Fidel Castro felt 
obliged in his own interest to endorse, 
evoked a very different response in 
Beijing, which recognized that Moscow 
was prepared to use force against 
another communist country even if the 
victim denied any intent to leave the 
alliance or abandon "socialism." If China 
needed further persuasion, the battle on 


February 1985 



the Ussuri River in 1969 and the hints 
of Soviet surgical strikes against Lop 
Nor must have encouraged it to look to 
its own hidden bonds of interest with 
the United States. What followed was 
surely a creative act of diplomacy, but it 
was a diplomacy which rested on the 
firm bedrock of substantial mutuality of 
strategic interest. 

One should not overload the circuit 
for diplomacy. In the case of Cuba, the 
U.S.S.R. is far away. From Havana's 
point of view, indeed, it may be slightly 
too far. It has been Moscow's large-scale 
military assistance that has enabled 
Cuba to conduct a militantly anti- 
American foreign policy. Cuba says this 
relationship with the Soviet Union is not 
negotiable. Only if Havana itself were to 
reassess its own fundamental objectives 
and decide that its interests were not be- 
ing well served by present policies would 
there be much room for creative 

Cuba's Revolutionary Imperative 

Another basic consideration is Cuba's 
own revolutionary imperative, anchored 
in the 1976 Cuban constitution, which 
states that Cuba has the right and duty 
to support revolutionary and national 
liberation movements. Cuba is more 
sophisticated today in its approach to 
revolution than in the 1960s. Where 
once its zeal conflicted with Moscow's 
preference for caution, the Cubans must 
now balance revolutionary aspirations 
against hopes for influence with other 
Latin American governments. But these 
objectives — revolution and regional in- 
fluence — are not necessarily self- 
contradictory. Cuban support for revolu- 
tionaries has been most effective when 
Havana was joined by noncommunist 
states in the region, as in the case of the 
Sandinista revolution in the late 1970s. 

Nevertheless, the greater sophistica- 
tion in the Cuban approach to stimula- 
tion and support of Latin American 
revolutionaries has not diluted the 
aboriginal combative spirit of the Castro 
regime. Havana knows very well who 
the revolutionaries are in Latin 
America, and it stays in close touch with 
developments. That touch means 
everything from scholarships, financial 

istance, political advice, and radio 
broadcasting through the hemisphere to 
military training and support and the 
provision of arms. Cuba's approach to 
revolutionaries who are not in power is 

latently to urge the formation of the 
wid< ble alliance on the left, not 

excluding alienated persons in the 
moderate center, with the purpose of 
building a successful revolutionary force. 
Only after the attainment and consolida- 
tion of power may the revolution begin 
to eat its own children. 

Fidel Castro has boasted that he had 
to tell the Soviet Union who the revolu- 
tionaries in Latin America are. He 
knows them, in part because they seek 
him out. Cuba is a mecca for Latin 
American revolutionaries and many a 
dissident Latin American politician. 
Those connections win Cuba influence 
even where prospects for revolution are 
either inauspicious on their own merits 
or to be played down on tactical 
grounds. By giving thumbs up, Fidel in- 
duced guerrillas in Colombia to spare 
the life of the brother of President 
Betancur. It could also have been 
thumbs down or no sign at all. This sort 
of influence is not lost on even those 
political leaders who have little sym- 
pathy for Cuba or for revolution. 

Cuba can also orchestrate the use of 
revolutionaries for political ends, even if 
their objective prospects for success are 
relatively remote. The introduction of 
Cuban-trained revolutionary forces into 
Honduras does not stem from any inter- 
nal conflict and might seem akin to the 
old foco approach. Apparently, it is in- 
tended primarily as a warning to Hon- 
duras not to oppose Cuba's friends on 
Honduras' southern and eastern borders. 

The events in Grenada last year 
came as a shock to Havana. It saw the 
loss of a protocommunist stronghold in 
the eastern Caribbean, the first direct 
military conflict between U.S. and 
Cuban forces, the surrender of many 
Cubans who had been expected to fight 
to the death, the unwillingness or inabili- 
ty of the Soviet Union to engage itself, 
the alignment of almost all the English- 
speaking Caribbean in favor of the ac- 
tion, the lack of any support in Grenada 
itself for the discredited regime, the 
overwhelming backing of the American 
public for the action, and, to add insult 
to injury, the expulsion of most of the 
Cuban presence from a promising situa- 
tion in Suriname. 

As a consequence, the Castro regime 
had little about which to cheer on the 
25th anniversary of its seizure of power. 
It had to do some serious taking of 
stock. Out of this review there seems to 
have emerged, alongside a greater ap- 
preciation of the remoteness of Moscow 
from the Americas, a redoubled sense of 
self-reliance and a perceived need to 
stress Latin American solidarity as a 
means of safeguarding gains in Central 

On August 30, 1984, looking on the 
bright side, the head of the America 
Department of the Communist Party 
Central Committee, Manuel Pineiro 
Losada, enunciated four reasons why 
Havana did not need to be pessimistic 
about prospects for Latin America. 

First, he said, the Cuban revolution 
was stronger than ever. 

Second, Somoza no longer ruled in 

Third, the oligarchy could not 
destroy the revolutionary movement in 
El Salvador. 

Fourth, representative democracies 
in Latin America were rebelling against 
"imperalist domination." 

What he seemed to be saying was 
that Cuba, if necessary by means of a 
people's war, is now strong enough 
alone to defy the United States, that the 
Nicaraguan regime would be able to con- 
solidate itself, that the guerrillas in El 
Salvador could, at least, not be defeated, 
and that the United States cannot count 
on support from even democratic Latin 
American governments. 

For the present, then, Cuba's revolu- 
tionary emphasis seems first to be 
centered on the defense of its own 
revolution, then on the consolidation of 
the Nicaraguan regime, and thirdly on a 
settlement in El Salvador which ad- 
vances the prospects of the guerrillas 
for a share of power. Cuba sees Central 
America as the revolutionary cockpit 
where its energies must now be concen- 
trated, while at the same time 
acknowledging that Cuban military 
forces could not be reinforced in case of 
combat. For the moment, at least, Cuba 
appears to be shaping its attitude 
toward other states in the hemisphere 
primarily on their stand on Nicaragua 
and El Salvador. 

This more prudent tactical approach 
is, in part, a reaction to adverse 
developments. What are the hidden 
bonds of interest with the United 
States? Cuba does wish to avoid a major 
war in Central America where U.S. and 
Cuban soldiers might again come face to 
face. However, Havana has made clear 
that its support for revolution, like the 
Soviet alliance, is not for negotiation. It 
continues to support regimes or revolu- 
tionary movements patterned on the 
Cuban model. It is Cuba's striving, with 
Soviet support, to introduce Marxist- 
Leninist regimes throughout the 
hemisphere which still lies at the heart 
of our differences. 


Department of State Bulletin 


Cuba's America 

Aside from the revolutionary imperative, 
Cuba also seeks to build an anti-U.S. 
regional bloc of Latin American coun- 

There is, at least potentially, a con- 
flict between supporting communist 
revolution in Latin America and the 
Caribbean and wanting to be accepted 
as a pillar of stability in the region. 
Cuba aspires to be accepted both as a 
revolutionary symbol and a leader 
among Latin American states. Bridging 
this gap in the face of historically based 
suspicions is no simple task for Cuba. 
However, historically or culturally based 
resentments against the United States 
in the region can be exploited by Cuba. 
Here again, criticism of the United 
States might be the common denomina- 
tor which Havana would try to exploit in 
building Latin American regionalism. 

Despite its emphasis on revolution, 
at least as a final goal, Cuba frequently 
appears to give priority to building a 
Latin American bloc. Its rush to support 
the Galtieri regime in Argentina is a 
case in point, where a chance to show 
Latin American solidarity against the 
United States weighed more for Havana 
than the regime's domestic policy. The 
current effort by Cuba to utilize the 
regional debt crisis is in the same spirit 
of putative regional alignment. If Cuba 
were to deemphasize violent revolution 
and political dictatorship in order to im- 
prove its status in the Latin American 
community, we might have some 
positive bond of interest. Even if this 
thrust were initially directed against the 
United States, we could hope that Cuba 
would eventually turn its human 
resources toward more positive objec- 
tives in the region. 

Unfortunately, there is no present 
sign that Cuba, which allows no form of 
dissent at home, will be prepared to re- 
nounce its efforts to produce analogous 
regimes in the region. 

The hard reality is that both Cuba's 
objective of promoting Marxist-Leninist 
type revolutions in Latin America and 
the Caribbean and its goal of creating 
subregional solidarity are linked to its 
desire to diminish American influence in 
the region. 

Dealing With Cuba 

The relationship between the United 
States and Cuba, especially with 
reference to Cuba's policies in third 
countries, has been essentially 
characterized by conflict. Unfortunately, 

this seems unlikely to change unless 
there is some fundamental reassessment 
in Havana of Cuba's need to act as a 
multiregional power in consonance with 
the Soviet Union. 

There are some bonds of interest, 
however, which, while they cannot 
bridge the profound ideological and 
geopolitical gaps between us, at least 
allow for the solution of some important 
problems. While it would be an error not 
to try to resolve issues which seem 
susceptible to resolution, it would be un- 
founded to suppose that such efforts 
under current circumstances will lead to 
fundamental improvement in our rela- 
tions. Such excessive expectations would 
only lead to frustration and could even 
undermine realistic efforts to resolve 
what can be resolved. 

It is true that we have neither 
reconciled our differences with the 
Castro regime nor terminated its ex- 
istence as a threat to U.S. interests and 
to those of friendly nations. We are not 
able to do the first because Castro's in- 
terests require an adversary relation- 
ship. Efforts to conciliate Cuba have 
coincided with some of the most active 
periods of Cuban-Soviet cooperation 
toward objectives inconsistent with U.S. 
interests. We could not do the second 
without direct use of military force 
against Cuba. 

There still is room for some con- 
structive diplomacy, however. The 
recently concluded agreement on migra- 
tion is an important achievement on its 
merits and very much in the U.S. in- 
terest. It will also benefit Cuba, which 
would otherwise not have signed it. It is 
an example of a situation where we 
were able to find and exploit positive 
bonds of interest although the diplomatic 
process was enormously complicated by 
the history of the past quarter century. 

The background of this problem is 
known to most of you. In order to 
relieve itself of domestic pressures, 
which in 1980 exploded into embarrass- 
ing diplomatic problems with Latin 
American states, the Cuban leadership 
turned to its favorite foe and opted to 
open its doors to a mass exodus to the 
United States. Among the 129,000 
Cubans who came with the Mariel 
boatlift were several thousand criminals 
or mentally incompetent persons who 
have been a heavy burden on U.S. socie- 
ty and who were ineligible for lawful ad- 
mission to the United States under U.S. 
immigration law. 

A serious effort to negotiate their 
return to Cuba was made in the final 
weeks of the Carter Administration with 
the approval of the Reagan transition 
team. We offered Cuba, then, as in 1983 
and 1984, the resumption of normal im- 
migrant visa processing in the U.S. In- 
terests Section in Havana and the 
resumption of a program under which 
expolitical prisoners and their families 
could come to the United States. These 
talks failed because Cuba would agree to 
consider the return of the so-called 
Mariel excludables only if they were 
returning voluntarily and only on a case- 
by-case basis. 

It was obvious that those Cuban con- 
ditions would have frustrated any solu- 
tion to the Mariel problem since hardly 
anyone wished to return to Cuba of his 
own volition. Thus the Mariel ex- 
cludables continued to be a serious prob- 
lem for state and local governments in 
the United States, for law enforcement 
agencies, and for the American public. 
The activities of this criminal element 
also gave an unmerited black eye to the 
overwhelming majority of Cubans who 
participated in the boatlift and, judging 
by public opinion polls, soured the at- 
titude of many Americans toward 

The pressures which the U.S. 
Government applied to Cuba were to 
deny issuance of preference immigrant 
visas in Havana and to suspend the 
refugee program. Obviously, both of 
these caused hardships to innocent per- 
sons as well, but without them there 
would have been no solution to the prob- 
lem. Conversely, Cuba's stand cost it 
seriously in terms of U.S. opinion, in- 
cluding many persons who might other- 
wise have been more favorably disposed 
toward Cuba. 

We proposed in May 1983 that Cuba 
simply take back the Mariel excludables, 
in exchange for which we would have 
resumed normal processing of im- 
migrant visas. Cuba responded negative- 
ly, but in the exchange of notes which 
followed, it did not rule out discussing 
the issue in a rather ill-defined 
framework of migration issues. The 
events in Grenada brought this ini- 
tiative, temporarily, to a close. In March 
and again in May of the present year, 
we again proposed talks. Cuba ultimate- 
ly agreed in principle to talk but only 
after the U.S. elections. 

February 1985 



Although we found it curious that 
Cuba would cite our election campaign 
as grounds for further delay in discuss- 
ing this matter, we had to accept 
Havana's decision. We did plan to 
resume a limited refugee program, 
unilaterally, in Havana. 

At this point we were consulted by 
Jesse Jackson's staff as to what issues 
he might raise while in Cuba. We men- 
tioned Mariel and the question of long- 
term Cuban political prisoners. When we 
learned that Fidel Castro had agreed to 
earlier talks, we at once proposed an 
early date, and Cuba agreed. 

These negotiations, although strictly 
limited to migration issues, were en- 
cumbered by mutual fears about inten- 
tions. In the end we achieved a result 
which is satisfying in all respects to the 
United States. 

The main elements of the agreement 
are that some 2,700 common criminals 
will be returned to Cuba in an orderly 
and phased manner, that normal im- 
migrant visa processing will resume at 
once in Havana, and that up to 3,000 ex- 
political prisoners and their families will 
come to the United States in the current 
fiscal year, with the expectation that 
this humanitarian program will continue 
in future years. 

We were successful in this endeavor 
because our objectives were limited and 
realistic and we were prepared to offer 
the Cubans what they recognized was a 
reasonable bargain. The Cubans will be 
able to get one very large monkey off 
their backs. They will also make a lot of 
hard currency in the process through the 
charges they place on the emigration 

Welcome as this agreement is, 
however, it should not be taken as in- 
dicating change in our resolve to deal 
firmly with Cuba's aggressive foreign 
policy. We do diplomacy a disservice if 
we exaggerate what it can accomplish. 
After all, Machiavelli never said that 
hidden bonds of interests alone would 
make enemies cease to be enemies. A 
good deal more is required. 

We do not despair for the future of 
Cuba. A people of such enormous talents 
with their roots in the enlightening proc- 
ess of Western civilization cannot re- 
main forever in the sway of a political 
doctrine which stifles human endeavor 
and creativity, fails to reward initiative, 
does not respect human rights, and for- 
cibly excludes the population from the 
political process. If, in the meantime, 
ivthing useful to tell us, or 
the means of formal corn- 
between "in- two govern- 
ed can Ik- used. For Cuba 

the way back from its present alienation 
from the political democracy which is ad- 
vancing throughout the hemisphere will 
be long and arduous. Havana may some- 
day realize that its own best interests 
would be served if it again joined the 
American mainstream. In those cir- 
cumstances there would be open and ob- 
vious bonds of interest between us. 

A Cuba that wished to live in peace 
and harmony with its own citizens and 
with its neighbors in this increasingly 
free hemisphere would be welcomed 
back in the comity of American states. 
First must come the will. Then there 
could be a way. ■ 

December 1984 

The following are some of the signifi- 
cant official U.S. foreign policy actions and 
statements during the month that are not 
reported elsewhere in this periodical. 

December 3-9 

Five hijackers— believed to be members of an 
Iranian-backed Shiite terrorist group— force 
a Kuwaiti airliner with about 155 people 
aboard to land in a Tehran airport and then 
demand the release of prisoners in Kuwait. 

During the 7-day seige, the hijackers 
release women (including two Americans), 
children, and selected hostages sporadically; 
five hostages are slain including two U.S. 
AID employees. On Dec. 9, Iranian 
authorities rescue the remaining hostages in- 
cluding an AID employee and a U.S. 

December 5 

President Reagan announces that 300,000 
metric tons of U.S. wheat is available for 
emergency food programs for Africa and 
South Asia. 

December 6 

While attending a Caribbean conference in 
Miami, Secretary Shultz meets with El 
Salvador President Duarte to discuss the 
Salvadoran economic situation. 

December 9 

Secretary Shultz and Israeli Foreign Minister 
Shamir hold bilateral talks in New York. 

December 10 

The following newly appointed ambassadors 
present their credentials to President 
Reagan: Adrien Raymond (Haiti), Asterius 
Magnus Hyera (Tanzania), Pablo Mauricio 
Alvergue (El Salvador), Mohsin Ahmed al- 
Ayni (Yemen), A.Z.M. Obaidullah Khan 
(Bangladesh), Ghazi Muhammad al-Gosaibi 
(Bahrain), and El Sayed Abdel Raouf El 
Reedy (Egypt). 

December 14 

U.S. lifts its objection to Poland's member- 
ship in the IMF. 

December 17 

UN General Assembly adopts a Soviet- 
sponsored draft resolution condemning states 
with policies and practices of terrorism. 
Originally aimed at U.S. policies, the text is 
sufficiently changed to permit abstentions by 
Western and some nonaligned members. The 
vote is 177 to 0, with 30 abstentions (U.S.). 

December 18 

U.S. votes against the approval of the $73.5 
million budget for a conference center in 
Addis Ababa. The vote is 122 to 5, with 16 

December 19 

U.S. announces agreements with Japan, 
Korea, Australia, Spain, South Africa, Mex- 
ico, and Brazil to limit steel exports to the 

December 20 

President Reagan authorizes a $1 million 
grant to the U.S.-ASEAN Center for 
Technology Exchange by AID. ■ 


Department of State Bulletin 


Current Actions 



Convention on international civil aviation. 
Done at Chicago Dec. 7, 1944. Entered into 
force Apr. 4, 1947. TIAS 1591. 

Protocol on the authentic trilingual text of 
the convention on international civil aviation 
(TIAS 1591), with annex. Done at Buenos 
Aires Sept. 21, 1968. Entered into force Oct. 
24. 1968. TIAS 6605. 
Adherences deposited: Brunei, Dec. 4, 1984. 

International air services transit agreement. 
Done at Chicago Dec. 7, 1944. Entered into 
force Jan. 20. 1945; for the U.S. Feb. 8, 
1945. 59 Stat. 1693; EAS 487. 
Notification of succession : Brunei, Dec. 4, 
1984; effective Jan. 3, 1985. 

Biological Weapons 

Convention on the prohibition of the develop- 
ment, production, and stockpiling of bacterio- 
logical (biological) and toxin weapons and on 
their destruction. Done at Washington, Lon- 
don, and Moscow Apr. 10, 1972. Entered into 
force Mar. 26, 1975. TIAS 8062. 
Accession deposited : China, Nov. 15, 1984. J 


International coffee agreement, 1983, with 
annexes. Done at London Sept. 16, 1982. 
Entered into force provisionally Oct. 1, 1983. 
Approval deposited: France, Nov. 13, 1984. 
Ratifications deposited: Belgium, Luxem- 
bourg, Oct. 15, 1984; Bolivia, Oct. 11, 1984; 
Panama, Oct. 25, 1984. 


Agreement establishing the Common Fund 
for Commodities, with schedules. Done at 
Geneva June 27, 1980. 2 
Ratification deposited : Italy, Nov. 20, 1984. 

Customs— Containers 

Customs convention on containers, 1972, 

with annexes and protocol. Done at Geneva 

Dec. 2, 1972. Entered into force Dec. 6, 


Ratifications deposited: Republic of Korea, 

Oct. 19, 1984; U.S., Nov. 12, 1984. 

Enters into force for the U.S. : May 12, 1985. 

Judicial Procedure 

Convention on the civil aspects of interna- 
tional child abduction. Done at The Hague 
Oct. 25, 1980. Entered into force Dec. 1, 
1983. 3 

Signature: U.K., Nov. 19, 1984. 
Extended by Canada to : Province of Quebec, 
Oct. 11, 1984; Yukon Territory, Nov. 16, 


International agreement on jute and jute 
products, 1982, with annexes. Done at 
Geneva Oct. 1, 1982. Entered into force pro- 
visionally Jan. 9, 1984. 
Approval depo sited: France, Nov. 13, 1984. 

Maritime Matters 

International convention on maritime search 

and rescue, 1979, annex. Done at Hamburg 

Apr. 27, 1979. 

Ratifi cation deposited : Denmark, June 21, 


Enters into force : June 22, 1985. 


Convention of the World Meteorological 
Organization. Done at Washington Oct. 11, 
1947. Entered into force Mar. 23, 1950. 
TIAS 2052. 
Accession deposited : Brunei, Nov. 26, 1984. 

Nuclear Weapons— Nonproliferation 

Treaty on the nonproliferation of nuclear 
weapons. Done at Washington, London, and 
Moscow July 1, 1968. Entered into force 
Mar. 5, 1970. TIAS 6839. 
Notification of succession deposited : St. 
Vincent and the Grenadines, Nov. 6, 1984. 

Satellites— Program-Carrying Signals 

Convention relating to the distribution of 
program-carrying signals transmitted by 
satellite. Done at Brussels May 21, 1984. 
Entered into force Aug. 25, 1979. 
Ratification deposited : U.S., Dec. 7, 1984. 
Enters into force for the U.S. : Mar. 7, 1985. 


International sugar agreement, 1984, with 
annexes. Done at Geneva July 5, 1984. 
Enters into force Jan. 1, 1985, or any date 
thereafter, if by that date certain re- 
quirements have been met. 
Signatures : Bolivia, Dec. 18, 1984; Colombia, 
Oct. 30, 1984; Costa Rica, Nov. 19, 1984; 
Cuba, Swaziland, Dec. 13, 1984; Fiji, Sweden, 
Dec. 19, 1984; Guatemala, Nov. 29, 1984; 
Nicaragua, Nov. 15, 1984; Panama, Dec. 11, 
1984; U.S., Dec. 7, 1984. 
Notifications of provisional application 
deposited: Bolivia, Dec. 18, 1984; Costa Rica, 

Dec. 19, 1984; Panama, Dec. 11, 1984; U.S., 
Dec. 7, 1984. 

Ratifications deposited: Fiji, Sweden, 
Dec. 19, 1984. 


Convention on the prevention and punish- 
ment of crimes against internationally pro- 
tected persons, including diplomatic agents. 
Adopted at New York Dec. 14, 1973. 
Entered into force Feb. 20, 1977. TIAS 8532. 
Accession deposited : Jordan, Dec. 18, 1984. 

International convention against the taking of 
hostages. Done at New York Dec. 17, 1979. 
Entered into force June 3, 1983; for the U.S. 
Jan. 6, 1985. 
Ratification deposited : U.S., Dec. 7, 1984. 


International dairy arrangement. Done at 
Geneva Apr. 12, 1979. Entered into force 
Jan. 1, 1980. TIAS 9623. 
Notification of with drawal: U.S., Dec. 14, 
1984; effective Feb. 12, 1985. 

Agreement on interpretation and application 
of articles VI, XVI, and XXIII of the general 
agreement on tariffs and trade (subsidies and 
countervailing duties code). Done at Geneva 
Apr. 12, 1979. Entered into force Jan. 1, 
1980. TIAS 9619. 

Acceptance deposite d: Portugal, Nov. 15, 


Constitution of the United Nations Industrial 
Development Organization, with annexes. 
Adopted at Vienna Apr. 8, 1979. 2 
Ratification deposited : Cape Verde, Nov. 27, 



Agreement concerning the furnishing of 
balloon launching and associated services, 
with arrangement. Effected by exchange of 
notes at Canberra July 16 and Oct. 18, 1984. 
Entered into force Oct. 18, 1984. 


Agreement extending the interim agreement 
of July 11, 1984, on air transport services. 
Effected by exchange of notes at Brasilia 
Dec. 10, 1984. Entered into force Dec. 10, 


Program of cultural, educational, scientific, 
and technological exchanges for 1985 and 
1986. Signed at Washington Dec. 14, 1984. 
Entered into force Dec. 14, 1984; effective 
Jan. 1, 1985. 


Treaty relating to the Skagit River and Ross 
Lake, and the Seven Mile Reservoir on the 
Pend d'Oreille River, with annex. Signed at 
Washington Apr. 2, 1984. 
Ratifications exchanged : Dec. 14, 1984. 
Entered into force : Dec. 14, 1984. 

Agreement amending the agreement of 
Mar. 9, 1959, as amended (TIAS 4192, 5117, 
5608, 6236, 7408, 9003, 9883, 10363), gov- 
erning tolls on the St. Lawrence Seaway, 
with memorandum of agreement. Effected by 
exchange of notes at Washington Nov. 13 
and 16, 1984. Entered into force Nov. 16, 

Costa Rica 

Agreement for the sale of agricultural com- 
modities. Signed at San Jose Nov. 19, 1984. 
Enters into force when the importing country 
notifies the exporting country that all con- 
stitutional requirements have been met. 

February 1985 





Agreement relating to agreement of Mar. 28 
and 29, 1955, as amended (TIAS 3230, 5426), 
relating to investment guaranties. Effected 
by exchange of notes at Quito Nov. 28, 1984. 
Entered into force Nov. 28, 1984. 


Agreement to establish an artist fellowship 
exchange program. Signed at Washington 
Nov. 30, 1984. Entered into force Nov. 30, 

Federal Republic of Germany 

Agreement concerning acquisition and 
possession of privately-owned weapons by 
personnel of U.S. Armed Forces in Germany, 
with annex. Signed at Bonn Nov. 29, 1984. 
Enters into force 1 month after the day upon 
which the F.R.G. notifies the U.S. that 
domestic prerequisites have been fulfilled. 


Agreement regarding the consolidation and 
rescheduling of certain debts owed to, 
guaranteed by, or insured by the U.S. 
Government and its agencies, with annexes. 
Signed at Washington Nov. 8, 1984. Entered 
into force Dec. 13, 1984. 


Agreement to extend the joint determination 
of Oct. 30, 1981 (TIAS 10294), for reprocess- 
ing of special nuclear material of U.S. origin. 
Effected by exchange of notes at Tokyo 
Oct. 30, 1984. Entered into force Oct. 30, 


Agreement amending agreement of Dec. 1, 
1982, as amended, relating to trade in cotton, 
wool, and manmade fiber textiles and textile 
products. Effected by exchange of letters at 
Washington Oct. 23 and Nov. 28, 1984. 
Entered into force Nov. 28, 1984. 


Agreement relating to the employment of 
dependents of official government employees. 
Effected by exchange of notes at Washington 
Aug. 21 and Oct. 16, 1984. Entered into 
force Oct. 16, 1984. 


Agreement extending the air transport 
agreement of Aug. 15, 1960, as amended and 
extended (TIAS 4675, 7167), and the agree- 
ment of Jan. 20, 1978, relating to reduced air 
fares and charter air services (TIAS 10115). 
Effected by exchange of notes at Mexico 
Dec. 14, 1984. Entered into force Dec. 14, 

Agreement relating to additional cooperative 
arrangements to curb the illegal traffic in 
narcotics. Effected by exchange of notes at 
Mexico Nov. 5, 1984. Entered into force 
Nov. 5, 1984. 

Agreement amending agreement of May 17, 
1984, relating to additional cooperative ar- 
rangements to curb the illegal traffic in nar- 
cotics. Effected by exchange of letters at 
Mexico Sept. 25 and Oct. 10, 1984. Entered 
into force Oct. 10, 1984. 

Agreement amending the agreement of 
June 2, 1977 (TIAS 8952), relating to addi- 
tional cooperative arrangements to curb the 
illegal traffic in narcotics. Effected by ex- 
change of letters at Mexico Oct. 29, 1984. 
Entered into force Oct. 29, 1984. 


Agreement regarding housing civilian and 
military personnel of U.S. forces stationed in 
Panama. Effected by exchange of notes 
Nov. 29, 1984; effective Oct. 1, 1984. 

Agreement concerning the transfer by the 
U.S. of certain facilities and installations to 
Panama. Effected by exchange of notes at 
Panama Mar. 9 and Nov. 13, 1984. Entered 
into force Nov. 13, 1984. 


Agreement relating to the employment of 
Portuguese nationals by the U.S. forces, 
Azores. Signed at Lisbon and Washington 
Oct. 9 and 16, 1984. Entered into force 
Oct. 16, 1984. 


Agreement relating to trade in wool and 
manmade fiber textiles and textile products. 
Effected by exchange of notes at Bucharest 
Nov. 7 and 16, 1984. Entered into force 
Nov. 16, 1984; effective Jan. 1, 1985. 

Agreement amending agreement of Jan. 28 
and Mar. 31, 1983, relating to trade in cotton 
textiles. Effected by exchange of letters at 
Washington Dec. 5 and 12, 1984. Entered 
into force Dec. 12, 1984. 

United Kingdom 

Agreement concerning certain communica- 
tions facilities in the defense areas in the 
Turks and Caicos Islands. Effected by ex- 
change of notes at Washington Dec. 18, 1984. 
Entered into force Dec. 18, 1984. 

Agreement on social security. Signed at Lon- 
don Feb. 13, 1984. Entered into force Jan. 1, 
1985, except for Part III which enters into 
force Jan. 1, 1988. 

Administrative agreement for implementation 
of agreement on social security. Signed at 
London Feb. 13, 1984. Entered into force 
Jan. 1, 1985. 

Department of State 

Press releases may be obtained from the Of- 
fice of Press Relations, Department of State, 
Washington, D.C. 20520. 






Foreign Relations of the 
United States 1952-1954, 
Volume II: National 
Security Affairs (in two 
parts) released. 

'257 12/4 Private sector advisory 
group to address Third 
World hunger problems. 
258 12/6 Shultz: address before the 
eighth annual conference 
on trade, investment, and 
development in the Carib- 
bean Basin, Miami. 

*259 12/10 Program for the official 
working visit to Wash- 
ington, D.C, of Niger 
President Seyni Kountche, 
Dec. 10-13. 
260 12/10 Shultz: address at the con- 
vocation of Yeshiva 
University, New York City, 
Dec. 9. 
Shultz: arrival statement, 

Brussels, Dec. 12. 
Shultz, Block, Brock, Thorn, 
et al.: joint news con- 
ference, Brussels, Dec. 14. 
Shultz: news conference, 
Brussels, Dec. 14. 
[Not issued.] 

12/20 American Foreign Policy: 
Current Documents, 1981 

*266 12/19 Shipping Coordinating Com- 
mittee (SCC), Subcommit- 
tee on UNCTAD, Jan. 17. 

*267 12/20 Shultz: remarks at Christmas 
tree lighting ceremony, 
Department of State. 

*268 12/26 Program for the official 
working visit to Los 
Angeles of Japanese Prime 
Minister Yasuhiro 
Nakasone, Jan. 1-2. 




263 12/20 


*Not printed in the Bulletin. 

'With statement. 

2 Not in force. 

3 Not in force for the U.S. 

4 With reservation(s) and declaration(s). 


Department of State Bulletin 


Department of State 

Free single copies of the following Depart- 
ment of State publications are available from 
the Correspondence Management Division, 
Bureau of Public Affairs, Department of 
State, Washington, D.C. 20520. 

Free multiple copies may be obtained by 
writing to the Office of Opinion Analysis and 
Plans, Bureau of Public Affairs, Department 
of State, Washington, D.C. 20520. 

President Reagan 

Rededication to the Cause of Human Rights, 
ceremony commemorating Bill of Rights 
Day, Human Rights Day and Week, 
Dec. 10, 1984 (Current Policy #643). 

Secretary Shultz 

The Ethics of Power, convocation of Yeshiva 
University, New York City, Dec. 9, 1984 
(Current Policy #642). 

Democracy and the Path to Economic 
Growth, eighth annual Conference on 
Trade, Investment, and Development in the 
Caribbean Basin, Miami, Dec. 6, 1984 (Cur- 
rent Policy #641). 

Arms Control 

The Stockholm Conference: A Report on the 
First Year, Ambassador Goodby, L'Institut 
des Relations Internationales, Paris, Dec. 3, 
1984 (Current Policy #639). 


The Medium-Term Outlook for the World 
Economy, Assistant Secretary McCormack, 
Austrian Society for Foreign Policy and In- 
ternational Relations, Vienna, Nov. 22, 
1984 (Current Policy #644). 

U.S. Trade Policy (GIST, Dec. 1984). 


Reflections on East-West Relations, Am- 
bassador Burns, Chamber of Industry and 
Commerce, West Berlin, Nov. 27, 1984 
(Current Policy #637). 

U.S.-Soviet Relations (GIST, Dec. 1984). 

Middle East 

U.S. Relations With Saudi Arabia (GIST, 
Dec. 1984). 

South Asia 

South Asia and U.S. Foreign Policy, Under 
Secretary Armacost, World Affairs Council, 
Philadelphia, Dec. 12, 1984 (Current Policy 

Afghanistan: Five Years of Occupation, 
Bureau of Intelligence and Research, 
Department of State, Dec. 1984 (Special 
Report #120). 

Afghan Resistance and Soviet Occupation: 
A 5- Year Summary, Bureau of Intelligence 
and Research, Department of State, Dec. 
1984 (Special Report #118). 

Human Rights in Afghanistan (GIST, 
Dec. 1984). 

Western Hemisphere 

Latin America: The Struggle to Restore 
Economic Growth, Deputy Secretary Dam, 
World Affairs Council, Dallas, Dec. 5, 1984 
(Current Policy #640). 

The Role of Investment in Latin America's 
Economic Future, Ambassador Middendorf, 
Torcuato di Telia Institute of Argentina, 
Buenos Aires, Nov. 19, 1984 (Current 
Policy #638). ■ 

Background Notes 

This series provides brief, factual sum- 
maries of the people, history, government, 
economy, and foreign relations of about 170 
countries (excluding the United States) and 
of selected international organizations. Re- 
cent revisions are: 

Cyprus (Oct. 1984) 
Israel (Oct. 1984) 
Lebanon (Sept. 1984) 
Suriname (Oct. 1984) 
Vatican City (Nov. 1984) 
Index (Dec. 1984) 

A free single copy of one of the above 
(and an index of the entire series) may be 
obtained from the Correspondence Manage- 
ment Division, Bureau of Public Affairs, 
Department of State, Washington, D.C. 

For about 60 Background Notes a year, a 
subscription is available from the 
Superintendent of Documents, U.S. 
Government Printing Office, Washington, 
D.C. 20402, for $32.00 (domestic) and 
$40.00 (foreign). Check or money order, 
made payable to the Superintendent of 
Documents, must accompany order. ■ 

Current Documents 
Volume Released 

The Department of State on December 
20, 1984, released American Foreign 
Policy: Current Documents, 1981. This is 
the most recent volume in an ongoing 
Department of State documentary 

Like earlier volumes in the series, 
this book presents official public expres- 
sions of policy that best set forth the 
goals and objectives of U.S. foreign 
policy. Included are the texts of major 
official messages, addresses, statements, 
interviews, press conferences, briefings, 
reports, and communications by the 
White House, the Department of State, 
and other Federal agencies or officials 
involved in the foreign policy process. 

The volume contains 1,444 pages ar- 
ranged chronologically within 15 
geographic and topical chapters, and in- 
cludes a list of documents, editorial an- 
notations, maps, a list of abbreviations, 
and an index. 

The volume presents the major 
statements by President Reagan, the 
Secretary of State, and other govern- 
ment leaders setting forth the most im- 
portant general principles and objectives 
of American foreign policy in 1981. 
Major statements are also included on 
national security policy, arms control, 
foreign economic policy, the role of the 
United States in the United Nations, the 
approach to human rights around the 
world, the concern with refugees, and 
the Law of the Sea Conference. The 
volume also presents major statements 
of U.S. policy on the major regional and 
bilateral aspects of American foreign 
relations in 1981. 

This volume is the most recent in a 
documentary series begun in 1950. After 
an interruption following the publication 
of an annual volume for 1967, the series 
was resumed in 1983 with the publica- 
tion of American Foreign Policy: Basic 
Documents, 1977-1980. This volume for 
the events of 1981 is a revival of the 
earlier annual volumes. Volumes for 
1982 and 1983 have been prepared and 
will be printed and published as soon as 
possible in 1985. A volume for 1984 is 
underway now, and it is the Depart- 
ment's intention to publish that volume 
in 1985. Thereafter each annual volume 
will be published in the year after the 
events. Separate volumes for the years 
1969-72 and 1973-76 are also being 
planned for future publication. 

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February 1985 



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February 1985 
Volume 85, No. 2095 


Afghanistan: Five Years of Occupation (Karp, 
Trottier) 28 

South Asia and U.S. Foreign Policy 
(Armacost) 25 

Arms Control 

Secretary Visits Europe; Attends North 
Atlantic Council Meeting (statement, news 
conferences, final communique, extracts 
from minutes) 12 

The Stockholm Conference: A Report on the 
First Year (Goodby) 5 

Strategic Defense Initiative (White House 
statement) 24 

U.S. and West Germany's Commitment to 
Peace (joint statement) 20 

Brazil. The Medium-Term Outlook for the 
World Economy (McCormack) 9 

Cambodia. Vietnamese Attacks in Cambodia 
(Department statement) 8 


U.S., Cuba Resume Normal Migration (White 
House statement, Department summary, 
communique, minute on implementa- 
tion) 44 

The United States and Cuba (Skoug) 46 

Cyprus. U.S. Reaction to Agreement on 
Cvpriot Discussions (Department state- 
ment) 19 

Diplomacy. The Ethics of Power (Shultz) ... 1 


Latin America: The Struggle to Restore 
Economic Growth (Dam) 37 

The Medium-Term Outlook for the World 
Economy (McCormack) 9 

The Role of Investment in Latin America's 
Economic Future (Middendorf) 40 

Secretary Visits Europe; Attends North 
Atlantic Council Meeting (statement, news 
conferences, final communique, extracts 
from minutes) 12 

South Asia and U.S. Foreign Policy 
(Armacost) 25 


The Medium-Term Outlook for the World 
Economy (McCormack) 9 

Secretary Visits Europe; Attends North 
Atlantic Council Meeting (statement, news 
conferences, final communique, extracts 
from minutes) 12 

The Stockholm Conference: A Report on the 
First Year (Goodby) 5 

Germany. U.S. and West Germany's Com- 
mitment to Peace (joint statement) .... 20 

Grenada. The Ethics of Power (Shultz) 1 

Human Rights. Rededication to the Cause of 
Human Rights (Reagan, proclamation) . 21 

Immigration. U.S., Cuba Resume Normal 
Migration (White House statement, 
Department summary, communique, 
minute on implementation) 44 

India. South Asia and U.S. Foreign Policy 
(Armacost) 25 

Israel. The Ethics of Power (Shultz) 1 

Libya. U.S. Repeats Request That Americans 
Leave Libya (Department statement) . . 23 

Mexico. The Medium-Term Outlook for the 
World Economy (McCormack) 9 

Middle East. The Ethics of Power (Shultz) . . 1 

Military Affairs 

Secretary Visits Europe; Attends North 
Atlantic Council Meeting (statement, news 
conferences, final communique, extracts 
from minutes) 12 

Strategic Defense Initiative (White House 
statement) 24 

Niger. Visit of Niger's President (Kountche, 
Reagan) 4 


Secretary Visits Europe; Attends North 
Atlantic Council Meeting (statement, news 
conferences, final communique, extracts 
from minutes) 12 

U.S. and West Germany's Commitment to 
Peace (joint statement) 20 

Nuclear Policy. South Asia and U.S. Foreign 
Policy (Armacost) 25 


Afghanistan: Five Years of Occupation (Karp, 
Trottier) 28 

South Asia and U.S. Foreign Policy 
(Armacost) 25 

Passports. U.S. Repeats Request That 
Americans Leave Libya (Department 
statement) 23 

Presidential Documents 

Rededication to the Cause of Human Rights 
(Reagan, proclamation) 21 

Visit of Niger's President (Kountche, 
Reagan) 4 


Background Notes 53 

Current Documents Volume Released 53 

Department of State 53 


Afghanistan: Five Years of Occupation (Karp, 
Trottier) 28 

U.S., Cuba Resume Normal Migration (White 
House statement, Department summary, 
communique, minute on implementa- 
tion) 44 

South Asia. South Asia and U.S. Foreign 
Policy (Armacost) 25 

Sri Lanka. South Asia and U.S. Foreign 
Policy (Armacost) 25 


The Ethics of Power (Shultz) 1 

Secretary Visits Europe; Attends North 
Atlantic Council Meeting (statement, news 
conferences, final communique, extracts 
from minutes) 12 

Trade. Latin America: The Struggle to 
Restore Economic Growth (Dam) .... .37 

Treaties. Current Actions 51 

United Nations 

U.S. Confirms Withdrawal From UNESCO 

(Newell, Secretary's letter) 36 

U.S. Reaction to Agreement on Cypriot 

Discussions (Department statement) ... 19 
Afghanistan: Five Years of Occupation (Karp, 

Trottier) 28 

Secretary Visits Europe; Attends North 

Atlantic Council Meeting (statement, news 

conferences, final communique, extracts 

from minutes) 12 

The Stockholm Conference: A Report on the 

First Year (Goodby) 5 

The United States and Cuba (Skoug) 46 

Vietnam. Vietnamese Attacks in Cambodia 

(Department statement) 8 

Western Hemisphere 

Latin America: The Struggle to Restore 

Economic Growth (Dam) 37 

The Medium-Term Outlook for the World 

Economy (McCormack) 9 

The Role of Investment in Latin America's 

Economic Future (Middendorf) 40 

Name Index 

Armacost, Michael H 25 

Block, John R 12 

Brock, William E 12 

Dalsager, Poul 12 

Dam, Kenneth W 37 

Davignon, Viscount Etienne 12 

Goodby, James E 5 

Haferkamp, Wilhelm 12 

Karp, Craig 28 

Kountche, Seyni 4 

McCormack, Richard T 9 

Middendorf, J. William II 40 

Newell, Gregory J 36 

Reagan, President 4, 21 

Shultz, Secretary 1, 12, 36 

Skoug, Kenneth N. Jr 46 

Thorn, Gaston 12 

Trottier, Paul 28 

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he Official Monthly Record of United States Foreign Policyjj^flfr|m e 85 >/ Number 2096 

Arm » * 


Department of State 


Volume 85 / Number 2096 / March 1985 


(Calligraphy by Georgia Booth, Department of State) 

African famine victims. 

(UNHCR photo) 

Secretary Shultz shakes hands with Soviet 
Foreign Minister Gromyko at a reception at 
the U.S. mission in Geneva. 

(Wide World photo) 

The Department of State Bulletin, 
published by the Office of Public 
Communication in the Bureau of Public 
Affairs, is the official record of U.S. 
foreign policy. Its purpose is to provide the 
public, the Congress, and government 
agencies with information on developments 
in U.S. foreign relations and the work of 
the Department of State and the Foreign 

The Bulletin's contents include major 
addresses and news conferences of the 
President and the Secretary of State; 
statements made before congressional 
committees by the Secretary and other 
senior State Department officials; selected 
press releases issued by the White House, 
the Department, and the U.S. Mission to 
the United Nations; and treaties and other 
agreements to which the United States is 
or may become a party. Special features, 
articles, and other supportive material 
(such as maps, charts, photographs, and 
graphs) are published frequently to 
provide additional information on current 
issues but should not necessarily be 
interpreted as official U.S. policy 


Secretary of State 


Acting Assistant Secretary 
for Public Affairs 



Office of Public Communication 


Chief, Editorial Division 




Assistant Editor 

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publication of this periodical is necessary in the 
transaction of the public business required by law of 
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periodical has been approved by the Director of the 
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Department of State BULLETIN (ISSN 0041-7610) 
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For sale by the Superintendent of Documents, U.S. 
Government Printing Office, Washington, D.C. 


The President 

1 President Reagan's Second 
Inaugural Address 
■ 4 Enhancing Hemispheric 

5 President Reagan's News Con- 
ference of January 9 (Excerpts) 

7 President Reagan's Interview for 
a Japanese Newspaper 

The Secretary 

10 U.S. Government and Business: 

Our Common Defense Against 

1 3 The Future of American Foreign 

Policy: New Realities and New 

Ways of Thinking 
20 Secretary's Interview on "Meet 

the Press" 





Visit of Belgian Prime Minister 

Martens (WUfried Martens, 

President Reagan) 
Berlin (President Reagan) 
21st Report on Cyprus 

(President Reagan, Message 

to the Congress) 
Atlas of NATO (Harry F. Young) 

Military Affairs 

64 U.S. Withdrawal from the 

Proceedings Initiated by 
Nicaragua in the ICJ 
(Department Statement) 

65 The President's Strategic Defense 

Initiative (President Reagan) 
71 New Rules in Effect for 
Commercial Arms Sales 


23 U.S. Assistance and Africa's 
Economic Crisis 
(Chester A. Crocker) 

26 U.S. Food Assistance to Africa 

(President Reagan) 

27 African Hunger Relief Initiative 

Announced (President Reagan) 

28 Ethiopian Famine , . 

Arms Control 

29 Secretary Shultz and Foreign 

Minister Gromyko Agree on 
New Arms Control Negotiations 
(Robert C. McFarlane, President 
Reagan, Secretary Shultz, Joint 
33 U.S. Announces Arms Control 

Negotiators (President Reagan, 
Secretary Shultz) 

36 U.S.-U.S.S.R. Negotiations on 

Nuclear and Space Arms (White 
House Announcement) 

37 Geneva and Beyond: New Arms 

Control Negotiations 
(Kenneth W. Dam) 

39 CDE to Reconvene in Stockholm 

(President Reagan) 

East Asia 

40 President Reagan Meets With 

Japanese Prime Minister 
Nakasone (Yasuhiro Nakasone, 
President Reagan) 

South Asia 

72 Soviet Invasion of Afghanistan 

(President Reagan) 

United Nations 

73 The New U.S. Observer Role in 

UNESCO (Gregory J. Newell) 

Western Hemisphere 

75 Visit of Venezuelan President 
Lusinchi (Jaime Lusinchi, 
President Reagan) 

End Notes 

79 January 1985 


80 Current Actions 

Press Releases 

82 Department of State 
82 USUN 


82 Department of State 


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President Reagan's 
Second Inaugural Address 

The Rotunda 

U.S. Capitol 

January 21, 1985 1 

March 1985 

Senator Mathias, Chief Justice Burger, 
Vice President Bush, Speaker O'Neill, 
Senator Dole, Reverend Clergy, and 
members of my family and friends, and 
my fellow citizens. 

This day has been made brighter 
with the presence here of one who, for a 
time, has been absent. Senator John 
Stennis, God bless you and welcome 
back. [Applause.] 

There is, however, one who is not 
with us today. Representative Gillis 
Long of Louisiana left us last night. And 
I wonder if we could all join in a mo- 
ment of silent prayer. Amen. 

There are no words adequate to ex- 
press my thanks for the great honor 
that you've bestowed on me. I'll do my 
utmost to be deserving of your trust. 

This is, as Senator Mathias told us, 
the 50th time we the people have 
celebrated this historic occasion. When 
the first President — George Washing- 
ton — placed his hand upon the Bible, he 
stood less than a single day's journey by 
horseback from raw, untamed wilder- 
ness. There were 4 million Americans in 
a union of 13 States. Today, we are 60 
times as many in a union of 50 States. 
We've lighted the world with our inven- 
tions, gone to the aid of mankind 
wherever in the world there was a cry 
for help, journeyed to the Moon and 
safely returned. 

Domestic Goals 

So much has changed. And yet, we 
stand together as we did two centuries 
ago. When I took this oath 4 years ago, 
I did so in a time of economic stress. 
Voices were raised saying that we had 
to look to our past for the greatness and 
glory. But we, the present-day Ameri- 
cans, are not given to looking backward. 
In this blessed land, there is always a 
better tomorrow. 

Four years ago, I spoke to you of a 
new beginning, and we have accomp- 
lished that. But in another sense, our 
new beginning is a continuation of that 
beginning created two centuries ago, 
when, for the first time in history, 
government, the people said, was not 
our master, it is our servant; its only 
power that which we the people allow it 
to have. 

That system has never failed us. 
But, for a time, we failed the system. 
We asked things of government that 
government was not equipped to give. 
We yielded authority to the national 
government that properly belonged to 
States or to local governments or to the 
people themselves. We allowed taxes 
and inflation to rob us of our earnings 
and savings and watched the great in- 
dustrial machine that had made us the 
most productive people on Earth slow 
down and the number of unemployed in- 

By 1980 we knew it was time to 
renew our faith; to strive with all our 
strength toward the ultimate in in- 
dividual freedom, consistent with an 
orderly society. 

We believed then and now: There 
are no limits to growth and human prog- 
ress when men and women are free to 
follow their dreams. [Applause.] And we 
were right to believe that. Tax rates 
have been reduced, inflation cut 
dramatically, and more people are 
employed than ever before in our 

We are creating a nation once again 
vibrant, robust, and alive. But there are 
many mountains yet to climb. We will 
not rest until every American enjoys the 
fullness of freedom, dignity, and oppor- 
tunity as our birthright. It is our birth- 
right as citizens of this great republic. 
And, if we meet this challenge, these 
will be years when Americans have 


restored their confidence and tradition 
of progress; when our values of faith, 
family, work, and neighborhood were 
restated for a modern age; when our 
economy was finally freed from govern- 
ment's grip; when we made sincere ef- 
forts at meaningful arms reductions and 
by rebuilding our defenses, our econ- 
omy, and developing new technologies, 
helped preserve peace in a troubled 
world; when America courageously sup- 
ported the struggle for individual liber- 
ty, self-government, and free enterprise 
throughout the world and turned the 
tide of history away from totalitarian 
darkness and into the warm sunlight of 
human freedom. [Applause.] 

My fellow citizens, our nation is 
poised for greatness. We must do what 
we know is right and do it with our 
might. Let history say of us, these were 
golden years — when the American 
Revolution was reborn, when freedom 
gained new life, and America reached 
for her best. 

Our two-party system has served us 
well over the years but never better 
than in those times of great challenge, 
when we came together not as 
Democrats or Republicans but as 
Americans united in a common cause. 

Two of our Founding Fathers — a 
Boston lawyer named Adams and a 
Virginia planter named Jefferson — 
members of that remarkable group who 
met in Independence Hall and dared to 
think they could start the world over 
again, left us an important lesson. They 
had become, in the years then in govern- 
ment, bitter political rivals in the 
presidential election of 1800. 

And then, years later when both 
were restricted and age had softened 
their anger, they begin to speak to each 
other again through letters. A bond was 
reestablished between those two who 
had helped create this government of 

In 1826 — the 50th anniversary of 
the Declaration of Independence — they 
both died. They died on the same day, 
within a few hours of each other. And 
that day was the Fourth of July. 

In one of those letters exchanged in 
the sunset of their lives, Jefferson 
wrote, "It carries me back to the times 
when, beset with difficulties and 
dangers, we were fellow laborers in the 

e cause, struggling for what is most 
valuable to man, his right of self- 
government. Laboring always at the 
same oar, with some wave ever ahead 
threatening to overwhelm us, and yet 
passing harmless, we rode through the 

rm with heart and hand." 

With heart and hand, let us stand as 
one today: One people under God deter- 
mined that our future shall be worthy of 
our past. As we do, we must not repeat 
the well-intentioned errors of our past. 
We must never again abuse the trust of 
working men and women by sending 
their earnings on a futile chase after the 
spiraling demands of a bloated Federal 
establishment. You elected us in 1980 to 
end this prescription for disaster, and I 
don't believe you reelected us in 1984 to 
reverse course. [Applause.] 

At the heart of our efforts is one 
idea vindicated by 25 straight months of 
economic growth: Freedom and incen- 
tives unleash the drive and entre- 
preneurial genius that are a core of 
human progress. We have begun to in- 
crease the rewards for work, savings, 
and investment, reduce the increase in 
the cost and size of government and its 
interference in people's lives. 

We must simplify our tax system, 
make it more fair, and bring the rates 
down for all who work and earn. We 
must think anew and move with a new 
boldness, so every American who seeks 
work can find work; so the least among 
us shall have an equal chance to achieve 
the greatest things — to be heroes who 
heal our sick, feed the hungry, protect 
peace among nations, and leave this 
world a better place. 

The time has come for a new 
American emancipation — a great na- 
tional drive to tear down economic bar- 
riers and liberate the spirit of enterprise 
in the most distressed areas of our coun- 
try. My friends, together we can do this, 
and do it we must, so help me God. 

From new freedom will spring new 
opportunities for growth; a more pro- 
ductive, fulfilled, and united people; and 
a stronger America — an America that 
will lead the technological revolution and 
also open its mind and heart and soul to 
the treasuries of literature, music, and 
poetry and the values of faith, courage, 
and love. 

A dynamic economy, with more 
citizens working and paying taxes, will 
be our strongest tool to bring down 
budget deficits. But an almost unbroken 
50 years of deficit spending has finally 
brought us to a time of reckoning. 

We have come to a turning point, a 
moment for hard decisions. I have asked 
the Cabinet and my staff a question and 
now I put the same question to all of 
you. If not us, who? And if not now, 
when? It must be done by all of us going 
forward with a program aimed at 
reaching a balanced budget. We can 
then begin reducing the national debt. I 
will shortly submit a budget to the Con- 
gress aimed at freezing government pro- 

gram spending for the next year. 
Beyond this, we must take further steps 
to permanently control government's 
power to tax and spend. We must act 
now to protect future generations from 
government's desire to spend its citizens' 
money and tax them into servitude, 
when the bills come due. Let us make it 
unconstitutional for the Federal Govern- 
ment to spend more than the Federal 
Government takes in. [Applause.] 

We have already started returning 
to the people and to State and local 
governments responsibilities better 
handled by them. Now there is a place 
for the Federal Government in matters 
of social compassion. But our fundamen- 
tal goals must be to reduce dependency 
and upgrade the dignity of those who 
are infirm or disadvantaged. And here a 
growing economy and support from 
family and community offer our best 
chance for a society where compassion is 
a way of life, where the old and infirm 
are cared for, the young and, yes, the 
unborn protected, and the unfortunate 
looked after and made self-sufficient. 

There is another area where the 
Federal Government can play a part. As 
an older American, I remember a time 
when people of different race, creed, or 
ethnic origin in our land found hatred 
and prejudice installed in social custom 
and, yes, in law. There's no story more 
heartening in our history than the prog- 
ress that we've made toward the 
"brotherhood of man" that God intended 
for us. Let us resolve there will be no 
turning back or hestitation on the road 
to an America rich in dignity and abun- 
dant with opportunity for all our 
citizens. [Applause.] 

Let us resolve that we, the people, 
will build an American opportunity 
society, in which all of us — white and 
black, rich and poor, young and 
old — will go forward together, arm in 
arm. Again, let us remember that, 
though our heritage is one of bloodlines 
from every corner of the Earth, we are 
all Americans, pledged to carry on this 
last, best hope of man on Earth. [Ap- 

I have spoken of our domestic goals 
and the limitations we should put on our 
national government. Now let me turn 
to a task that is the primary responsibili- 
ty of national government — the safety 
and security of our people. 

National Security 

Today we utter no prayer more fervent- 
ly than the ancient prayer for peace on 
Earth. Yet history has shown that peace 
does not come, nor will our freedom be 

Department of State Bulletin 


As required by the Constitution, Ronald 
Reagan took the oath of office as President 
of the United States on January 20, 1985 
(Sunday), in a private ceremony at the 
White House. It was administered by Chief 
Justice Warren Burger while Mrs. Reagan 
held the family Bible. The public ceremony 
was held the following day. Because of in- 
clement weather, the public swearing-in 
and the inaugural address were held in the 
Rotunda of the U.S. Capitol. 

preserved, by good will alone. There are 
those in the world who scorn our vision 
of human dignity and freedom. One na- 
tion — the Soviet Union — has conducted 
the greatest military buildup in the 
history of man, building arsenals of 
awesome offensive weapons. 

We've made progress in restoring 
our defense capability. But much re- 
mains to be done. There must be no 
wavering by us, nor any doubts by 
others, that America will meet her 
responsibilities to remain free, secure, 
and at peace. [Applause.] 

There is only one way safely and 
legitimately to reduce the cost of na- 
tional security, and that is to reduce the 
need for it. And this we're trying to do 
in negotiations with the Soviet Union. 
We're not just discussing limits on a fur- 
ther increase of nuclear weapons. We 
seek, instead, to reduce their number. 
We seek the total elimination one day of 
nuclear weapons from the face of the 
Earth. [Applause.] 

For decades we and the Soviets 
have lived under the threat of mutual 
assured destruction; if either resorted to 
the use of nuclear weapons, the other 
could retaliate and destroy the one who 
had started it. Is there either logic or 
mortality in believing that, if one side 
threatens to kill tens of millions of our 
people, our only recourse is to threaten 
killing tens of millions of theirs? 

I have approved a research program 
to find, if we can, a security shield that 
will destroy nuclear missiles before they 
reach their target. It wouldn't kill peo- 
ple; it would destroy weapons. It 
wouldn't militarize space; it would help 

demilitarize the arsenals of Earth. It 
would render nuclear weapons obsolete. 
We will meet with the Soviets, hoping 
that we can agree on a way to rid the 
world of the threat of nuclear destruc- 

We strive for peace and security, 
heartened by the changes all around us. 
Since the turn of the century, the 
number of democracies in the world has 
grown four-fold. Human freedom is on 
the march, and nowhere more so than in 
our own hemisphere. Freedom is one of 
the deepest and noblest aspirations of 
the human spirit. People worldwide 
hunger for the right of self-determin- 
ation, for those inalienable rights that 
make for human dignity and progress. 

America must remain freedom's 
staunchest friend, for freedom is our 
best ally. [Applause.] And it is the 
world's only hope to conquer poverty 
and preserve peace. Every blow we in- 
flict against poverty will be a blow 
against its dark allies of oppression and 
war. Every victory for human freedom 
will be a victory for world peace. 

So we go forward today, a nation 
still mighty in its youth and powerful 
in its purpose. With our alliances 
strengthened, with our economy leading 
the world to a new age of economic ex- 
pansion, we look to a future rich in 
possibilities. And all of this is because 
we worked and acted together, not as 
members of political parties but as 

My friends, we live in a world that's 
lit by lightning. So much is changing and 
will change, but so much endures and 
transcends time. 

History is a ribbon, always unfurl- 
ing; history is a journey. And as we con- 
tinue our journey, we think of those who 
traveled before us. We stand again at 
the steps of this symbol of our de- 
mocracy — well, we would have been 
standing at the steps if it hadn't gotten 
so cold. [Laughter.] Now we're standing 
inside this symbol of our democracy. 
And we see and hear again the echoes of 
our past. 

A general falls to his knees in the 
hard snow of Valley Forge; a lonely 
President paces the darkened halls and 
ponders his struggle to preserve the 
union; the men of the Alamo call out en- 
couragement to each other; a settler 
pushes west and sings a song, and the 
song echoes out forever and fills the 
unknowing air. 

It is the American sound. It is 
hopeful, big-hearted, idealistic, daring, 
decent, and fair. That's our heritage, 
that's our song. We sing it still. For all 
our problems, our differences, we are 
together as of old. We raise our voices 
to the God who is the Author of this 
most tender music. And may He con- 
tinue to hold us close as we fill the 
world with our sound — in unity, affec- 
tion, and love. One people under God, 
dedicated to the dream of freedom that 
He has placed in the human heart, called 
upon now to pass that dream on to a 
waiting and a hopeful world. God bless 
you, and may God bless America. [Ap- 

'Text from White House press release. 

March 1985 


Enhancing Hemispheric Democracy 

President Reagan's remarks in a 
meeting with Western Hemisphere 
legislators in the Old Executive Office 
Building on January 2U, 1985. 1 

I know that many of you come from 
somewhat warmer climates and aren't 
accustomed to this Washington deep 
freeze, but I'll hope that the warmth of 
our hospitality has helped make up for 
the temperature outside. 

I think it's particularly fitting that 
your visit coincided with our inaugural 
time, when the mantle of power here in 
the United States is passed to the choice 
of the electorate. Wherever we are, no 
matter what our political agenda, those 
who believe in democracy and human 
rights should rejoice in times like these. 
Believing in the peaceful transfer of 
power through democratic elections and 
a solid respect for human rights unites 
all of us here today with millions of peo- 
ple across the globe. Recognizing that 
bond is what this gathering and this 
Center for Democracy are all about. 

I want to take this opportunity to 
thank the Democratic and Republican 
members of the U.S. Congress, Pro- 
fessor Allen Weinstein, Dr. John Silber, 
Peter Kelley, and Frank Fahrenkoph for 
all they've done to ensure the success of 
this conference. 

Being from democratic countries, 
you know it's difficult to get opposing 
political parties together, even in worth- 
while endeavors like this. The bipartisan 
support behind this effort reflects the 
value we place on enhancing long-range 
hemispheric collaboration among the 
free and democratic countries of the 
Americas. Building and reinforcing these 
ties has been of the utmost importance 
to this Administration and will continue 
to be so during the next 4 years. 

Our efforts are guided by three con- 
sistent and mutually reinforcing goals. 
We seek to promote the development of 
democratic political institutions. We 
want to encourage economic growth, 
which will increase opportunity and im- 
prove the standard of living for people 
throughout the hemisphere. We're will- 
ing to help our friends defend them- 

es against Soviet bloc, Cuban, and 
Nicaraguan sponsored subversion. 

Promoting Democratic Institutions 

I like to think that the first of these 
goal* is simply a reaffirmation of 
thing in which our forefathers 
firmly, and that is that free 

and democratic government is the birth- 
right of every citizen of this hemisphere. 
The Americas should be and, by right of 
heritage, ought to be populated by free 
and independent people. 

As you know, not long after our own 
War for Independence, Simon Bolivar 
led the people of Latin America in a 
courageous struggle for independence. 
Bolivar, like Washington, a giant in the 
annals of human freedom, pointed out in 
his later years: "It is harder to maintain 
the balance of liberty than to endure the 
weight of tyranny." 

The great liberator lamented that 
mankind is all too willing to rest un- 
concerned and accept things as they are. 
And that's why we, who are committed 
to free government and democratic in- 
stitutions, must maintain a sense of 
fraternity between ourselves and other 
freedom-loving peoples. 

Today there are many reasons for 
optimism. Despite economic problems 
and the threat of well-armed, anti- 
democratic forces, we Americans — and 
by that, I mean all of us, all Americans, 
from the north slope of Alaska to the tip 
of Tierra del Fuego — are enjoying a ris- 
ing tide of democracy. 

Of the 34 countries in Latin Amer- 
ica, 27, with about 90% of the region's 
population, are either democratic or in 
transition to democracy. A decade ago, 
less than 40% of Latin America's 
population was so fortunate. 

I'd like to take this opportunity to 
offer my heartfelt best wishes to the 
representatives who are with us from 
the hemisphere's newest democratic 
governments — Uruguay and Brazil. And 
I'd like also to offer my congratulations 
to the people in political leadership of 
Argentina, who, I understand, have 
been chosen by the center for the 1985 
International Democracy Prize. 

The trend to democracy not only 
underscores the desire of people to be 
free but also suggests a new recognition 
that free government is the surest path 
to economic progress. This was pointed 
out long ago by Andres Bello, one of the 
hemisphere's intellectual giants. "Liber- 
ty," he noted, "gives wings to the spirit 
of enterprise wherever it meets it." 

Encouraging Economic Growth 

Today, as never before, we need this 
spirit of enterprise to overcome the 
economic challenges of the hemisphere. 
The leap in energy prices, the onset of 

global recession in 1979 and 1980 
brought serious hardship throughout the 

Here in the United States, we 
countered the economic downturn with 
economic reforms that lowered tax 
rates, eliminated counterproductive 
government regulations, and brought 
down the rate of increase in government 
spending. We concentrated on pro- 
moting growth and opportunity, on en- 
couraging business enterprise and in- 
vestment. And this formula worked well 
for us. Last year, we had a growth rate 
of 6.8%. And that was the best since 
1951. And the inflation rate was only 
4%. In fact, it has only averaged 3.9% 
over the last 3 years. 

While putting our own economic 
house in order, we've tried to help our 
hemispheric neighbors and friends. We 
increased by over 50% the level of 
bilateral economic assistance over the 
previous Administration. We've con- 
tinued to support the World Bank, the 
Inter-American Bank, and the Interna- 
tional Monetary Funds programs. We've 
worked with leaders in government and 
the private sector to encourage the 
refinancing of international debt. Your 
cooperation has been indispensable in 
this effort. 

And last year a dramatic and in- 
novative approach to progress in Central 
America and the Caribbean went into ef- 
fect. It took considerable effort to pass 
the Caribbean Basin Initiative, and we're 
anxious to work with you to see that its 
benefits are enjoyed by all concerned. 

A few moments ago, I expressed op- 
timism about the course of political 
developments in the Americas. I'd like to 
add that I'm equally optimistic that our 
economic problems, which today seem so 
menacing, will be overcome. Free peo- 
ple, given time, will find a way to solve 
what may appear to be unsolvable. I can 
assure you, the people of the United 
States are anxious to work with your 
people to build a prosperous and 
opportunity-filled future. Our coopera- 
tion will enhance our chance for 
economic progress and help us meet 
some serious challenges to our security 
as well. 

Countering Outside Subversion 

The transition to democracy, especially 
in Central America, has been accom- 
panied by a concerted and well-financed 
effort by the Soviet bloc and Cuba to 

Department of State Bulletin 


undermine democratic institutions and 
to seize power from those who believe in 
democracy. This is nothing new. 
Venezuelans who struggled so long and 
hard for freedom faced this same threat 
as they transformed their country into a 
democracy. Similar subversion — fi- 
nanced, armed, and supported by the 
outside — has plagued Colombia and 
other countries as well. 

A new danger we see in Central 
America is the support being given the 
Sandinistas by Col. Qadhafi's Libya, the 
PLO [Palestine Liberation Organization] 
and, most recently, the Ayatollah 
Khomeini's Iran. 

The subversion we're talking about 
violates international law. The Organiza- 
tion of American States, in the past, has 
enacted sanctions against Cuba for such 
aggression. The Sandinistas have been 
attacking their neighbors through armed 
subversion since August of 1979. 
Countering this by supporting Nicara- 
guan freedom fighters is essentially act- 
ing in self-defense and is certainly con- 
sistent with the United Nations and 
OAS Charter provisions for individual 
and collective security. 

Two centuries ago, when our 
forefathers in the United States were 
risking all to establish our democracy, 
one of our Founding Fathers said: "We 
must all hang together or assuredly we 
shall all hang separately." 

I think it behooves all of us who 
believe in democratic government, in 
free elections, in the respect for human 
rights, to stand side by side with those 
who share our ideals, especially in Cen- 
tral America. We must not permit those 
heavily armed by a far-away dictatorship 
to undermine their neighbors and to 
stamp out democratic alternatives at 
home. We must have the same solidarity 
with those who struggle for democracy 
as our adversaries do with those who 
would impose communist dictatorship. 

It was just 1 year ago when the 
Bipartisan Commission on Central 
America, of which John Silber was a 
member, issued their report. These 
distinguished citizens concluded that 
there is, indeed, a threat to Central 
America. As they recommended, I have 
asked the U.S. Congress to provide $8 
billion in aid over the next 5 years for 
economic and social help. We're also tak- 
ing steps, including active diplomacy, to 
defuse a potential crisis. We support, for 
example, all 21 objectives of the Con- 
tadora process, including the implemen- 
tation of the democratic commitments 
made by the Sandinistas to the 
Organization of American States in 

I believe that the answer lies in 
democracy. There's never been a war be- 
tween two free countries. If we're for 
democracy, we're for peace, domestically 
and internationally. Today with democ- 
racy on the rise, we have it within our 
power to recapture Simon Bolivar's 
dream. We can have a united hemi- 
sphere, living in peace, opportunity, and 

The ideals we share have come of 
age and now is the time. We are the 

people. Democracy is the way. There are 
some 600 million of us from that tip of 
Tierra del Fuego up to that north coast 
of Alaska, bound together by a common 
heritage and history, all of us Ameri- 
cans, all of us worshiping the same God. 
What a power for good in the world we 
can be, if we strengthen our 
neighborliness and the contact and the 
cooperation between us. 

'Text from White House press release. 

News Conference of January 9 

Excerpts from President Reagan's 
news conference of January 9, 1985. 1 

Earlier today on his return from 
Geneva, Secretary Shultz reported to me 
on the full details of his discussions with 
Soviet Foreign Minister Gromyko over 
this past January 7th and 8th. As you're 
aware, his meeting with Mr. Gromkyo 
has resulted in agreement between our 
two nations to begin new negotiations 
on nuclear and space arms. Our objec- 
tive in these talks will be the reduction 
of nuclear arms and the strengthening 
of strategic stability. Our ultimate goal, 
of course, is the complete elimination of 
nuclear weapons. 

I want to take this opportunity to 
congratulate George Shultz, Bud 
McFarlane, and the rest of our delega- 
tion for a job well done. Their teamwork 
in Geneva was American diplomacy at 
its best. 

Our differences with the Soviets are 
many and profound. And these new 
negotiations will be difficult as we grap- 
ple with the issues so central to peace 
and security for ourselves, our allies, 
and the world. But we will persevere. 
And while we must continue to resist ac- 
tions by the Soviet Union that threaten 
our freedom and vital interests or those 
of other nations, we must also be 
prepared to work together wherever 
possible to strengthen the peace. 

When I spoke before the UN 
General Assembly this past September, I 
set out my objective and proposals for a 
more stable and constructive relation- 
ship between East and West. Today, it's 
my hope that this week's meeting in 
Geneva, while only a single step, is the 
beginning of a new dialogue between the 
United States and the Soviet Union. It's 
also my hope that as 1985 unfolds, this 
year will emerge as one of dialogue and 

negotiations, a year that leads to better 
relations between the United States and 
the Soviet Union. 

I believe a more stable peace is 
achievable through these negotiations, 
and I urge all Americans to join us in 
supporting this search for a more stable 
peace. But it takes two sides to have 
constructive negotiating; one side alone 
cannot do it. We've made clear our in- 
tentions and expectations for progress in 
U.S. -Soviet relations. Secretary Shultz 
has reinforced that message in his 
lengthy sessions with Mr. Gromkyo. For 
our part we'll be flexible, patient, and 
determined; and we now look to the 
Soviet Union to help give new life and 
positive results to that process of 

Q. If you are flexible, are you will- 
ing to trade off research on "Star 
Wars" technology for deep cuts in the 
Soviet nuclear arsenal, or are you set 
in concrete, as your advisers say, 
against any negotiations on "Star 

A. Let me say, what has been called 
"Star Wars" — and I wish whoever 
coined that expression would take it 
back again because it gives a false im- 
pression of what it is we're talking 
about — but that will be on the table with 
everything else, of course. There are no 
preconditions with regard to the talks 
that we're going to have. 

But this is research, a research pro- 
gram, and it is within the provisions of 
the ABM [antiballistic missile] treaty. 
So, all that we've made clear is that 
we're going forward on the research, but 
we've also made it clear that if that 
research does come up, as we hope, with 
something that could be the defensive 
weapon we're talking about, nonnuclear, 

March 1985 


then we would be willing to go into 
negotiations and discussions with the 
other nations of the world, and with our 
allies, about what to do about that and 
whether and how to deploy. 

Q. May I ask you, then, if "Star 
Wars"— even if you don't like the 
term, it's quite popular— is on the 
table for negotiations at some point 
where the technology might be 

A. I say, it's on the table only 
because we made it very clear. 

Q. But I mean it's not just a 
bargaining chip that could not be 

A. No, no. 

Q. In the past you have char- 
acterized the Soviet Union as an evil 
empire, and you have said that they 
have repeatedly violated the arms 
agreements that they have made with 
the United States. Some of your ad- 
visers today doubt that the technology 
exists to adequately verify any agree- 
ment. Do you believe verification is 
possible, or do you think the Soviets 
will try to violate any agreement you 
might make? 

A. We know that they have had a 
past record of violating agreements. We 
know also that absolute verification is 
impossible, but verification to the extent 
possible is going to be a very necessary 
feature in our negotiations. And I would 
like to also point out that because they 
themselves have expressed the desire to 
totally eliminate nuclear weapons, zero 
nuclear weapons is far easier to verify 
than if you're simply reducing the 
numbers. To have to continue trying to 
count numbers is much more difficult. 

Q. I'm a little confused by your 
original answer on, if you'll forgive 
me, "Star Wars" — if we can continue 
to use that term. You say that you're 
willing to negotiate about it now, but 
you also said that you want to go for- 
ward with research and only really 
discuss limits after it proves out 
whether the plan is feasible or not, 
which is sometime, perhaps, beyond 
your term— into 1990 or so. The ques- 
tion is now, in the talks that are going 
to begin this year, would you consider 
setting limits on the deployment and 
the testing of "Star Wars"? 

A. I think that would be way ahead 
of ourselves. We don't even know what 
kind of a weapon — if we're able to come 
up with one — that this would be. Now, I 
think rnaylx- some of you have been 
looking at those drawings on your TV 

news programs at night in which you've 
already got a picture of the weapon— 
and I can see it shooting missiles down, 
and it looks so easy. We don't know. 
That's why when I said "Star Wars" and 
criticized it, I never mentioned space or 
anything. I don't know, I'm not a scien- 

I said, all through history we've 
always been able to come up with a 
defensive weapon. Isn't it worth 
researching to see if there isn't some 
weapon that is more humane and moral 
than saying that the only defense we 
have in the nuclear age is that if they 
kill tens of millions of our people, we'll 
kill tens of millions of theirs? 

We're searching for a weapon that 
might destroy nuclear weapons, not be 
nuclear itself — destroy weapons, not 
people. And if we come up with such a 
thing, then is a time to turn to the 
world, to our allies, possibly even our 
adversaries, and say, "Look, we now 
have this." And if we haven't by that 
time eliminated nuclear weapons entire- 
ly, this could be a big contributing factor 
to bringing that about. 

Q. But aren't you running the risk 
of letting these arms talks break down 
over this issue? The Soviets say that's 
their top priority. 

A. No. no. We're — one of the three 
phases that has been agreed upon in 
what I think is a most successful 
meeting in Geneva is that we will be 
talking in three groups about strategic 
nuclear weapons — these are offensive 
weapons — about strategic intermediate- 
range weapons — again offensive — and 
there will be a third sector where we 
will be talking about defense and space, 
whether it has to do with weapons 
shooting things down that are in space 
or whether it's weapons in space 
shooting down. 

And, as I say, what we're doing with 
the research — and the Soviets had no 
argument about that, they couldn't 
argue about it — is to research, continue 
researching — is within the provisions of 
the ABM treaty. 

Q. Given the progress that you in- 
dicated made with the Soviets in these 
recent talks, do you feel that this 
might be the time now to have a sum- 
mit with Soviet leaders, Chernenko? 

A. To have a meeting, as I said 
before, just to have a meeting doesn't 
make any sense. Now, in the next month 
or so, we're all supposed to get together 
and find out when the negotiations can 
start and where. If, at any time, a 

reason arises in which a summit could be 
helpful in that or in other matters, and a 
carefully planned agenda created which 
they, themselves, have said is necessary, 
I'm perfectly willing, and have been all 
this time, to go to a summit meeting. 
I don't think it would make much 
sense simply to say, "Well, now that 
we're going to talk about these other 
things, let's have a meeting just to get 
acquainted." That builds up people's 
hopes. And some previous Presidents 
have done that and found that the let- 
down was very terrible. 

Q. Could you tell us if that summit 
conference was broached at all by 
Secretary Shultz to Foreign Minister 

A. About a summit? 

Q. Was it brought up in these 

A. No, they had a very carefully 
planned agenda. And, incidentally, there 
was no infighting among our group, and 
15 people that went over there as the 
total delegation were in complete 
unanimity in their support of what we 
arrived at. And they were, all of them, 
experts in their fields. And there has 
been no infighting, as some have sug- 
gested, about what we were going to 
talk about there. 

And there was very careful plan- 
ning, and my last meeting with George 
and Bud McFarlane was just a few 
hours before they got on the plane to go 
over there. But we had agreed upon 
what our agenda was going to be and 
what our demands are. 

Q. The time is drawing near when 
you will have to certify to Congress 
whether there's a need to continue 
supplying aid to the rebel forces in- 
side Nicaragua. And I'd like to ask if 
you intend to press on with this pro- 
gram when that date comes, or do you 
see any reason or any developments 
that have occurred that would permit 
the United States to drop this covert 
aid program? 

A. As you know, I shouldn't be talk- 
ing about anything that is supposed to 
be covert, but I will say this: that our 
plans, we have no plans for abandoning 
the overall ideas of help such as were 
created by the Kissinger commission 
down there — program proposed for over 
about the next 5 years to help those na- 
tions that are trying to become 
democracies to be democracies, and to 
support the people of Nicaragua, who, I 
have to point out, are governed by a 
group that took over by force— ousted 
others that had been fighting for a 
revolution. And I think that— and they 

Department of State Bulletin 


are supporting the guerrillas that are 
trying to overthrow the duly elected 
Government of El Salvador. And, no, 
we're not retreating from what we feel 
are obligations there in Central America 
at all. 

Q. By the end of the year, if the 
United States continues to deploy its 
strategic submarines as planned, it 
will exceed the limits for strategic 
missiles under the SALT [strategic 
arms limitation talks] II agreement, 
Mr. President. What is your intention 
with respect to that agreement? Are 
you going to decrease the number of 
ICBM's [intercontinental ballistic 
missiles] and outmoded submarine 
missiles in order to keep the SALT II 
agreement alive, even though it's not 

A. We have been holding to that and 
thought that it would be helpful in now 
what we're planning and going forward 
with. We have been eliminating some of 
the older missiles and taking out of serv- 
ice some of the submarines. We will con- 
tinue on that ground. 

The development of the Trident is 
not so much in the sense of adding to 
the nuclear force as it is in modernizing 
it, replacing older, less accurate missiles 
and submarines with not quite the 
capacity of the Trident. So, yes, we feel 
that we can live within it. 

Remember, the SALT II is nothing 
but a limitation on how fast you increase 
weapons, which is one of the reasons 
why I was in support of a Senate — even 
though I wasn't here at the time — that 
refused to ratify it. And that's why my 
belief is that the type of negotiations 
we're suggesting are the only ones that 
make sense. Don't just limit the rate of 
increase; reduce the number of weapons. 

Q. Your aides have said that they 
have some innovative, interesting 
ideas if the negotiations are resumed. 
What are your ideas? Defensive 
weapons aside, what are your ideas 
for reducing offensive systems, ideas 
that were not put forward in the 
negotiations that were aborted and 
could offer some hope for progress in 
this new round of negotiations? 

A. I don't want to give away 
anything in advance, the things that 
belong at the negotiating table. But, yes, 
one of the things that we've made clear 
to the Soviets is that we recognize there 
may be differences with regard to the 
mix of weapons on both sides. And we're 
prepared to deal with that problem, and 
where, perhaps, we have something that 
is an advantage to us, they have 
something that's an advantage to them, 
to discuss tradeoffs in that area. 

It is true that when we first went 
into the strategic missile negotiations, 
we believed that the top priority should 
be land-based missiles. But the Soviets 
made it plain that they didn't — they 
weren't following our pattern of mix of 
missiles, that they placed more reliance 
than we did on the landbased. And they 
didn't wait for us when we told them 
that we were willing to — okay, to deal 
with them on that problem. They went 
home anyway and didn't come back. 

But these are new negotiations. 
Both sides rule that they're new negotia- 

Q. Do you think that the Geneva 
meetings this week and the resump- 
tion of arms negotiations in the near 
future might lead to the new era of 
detente that Mr. Chernenko called for 
last November? 

A. I think that there will be other 
things talked about other than just 
weapons. And, yes. But let me make it 
plain about detente. That is a word 

that — been a little abused in the past in 
some ways. 

Yes, we would welcome such a thing 
as long as it was a two-way street. Our 
problem in the past has been that it has 
too much been a one-way street, and we 
were going the wrong way on that. So, 
we very definitely are trying to arrive at 
a position in which we can settle some of 
the other bilateral and regional issues 
that — and trade matters that are at 
odds between us. 

Q. What about other matters like 
Afghanistan, Southeast Asia — prob- 
lems there. Would they come up as 

A. We did not and I can't say 
whether we voiced our opinion of those 
in these meetings. They very well could 
have in the long hours of those meet- 
ings. But, no, all of those things — 
and we've made it very clear to them 
what our opinion is of some of those 

'Text from Weekly Compilation of 
Presidential Documents of Jan. 14, 1985. 

President Reagan's Interview 
for a Japanese Newspaper 

President Reagan's responses to ques- 
tions from the Yomiuri Shimbun of 
Tokyo on December 28, 1984. 1 

Q. The year 1985 marks the 40th 
anniversary of the end of World War 
II. At this date, how do you perceive 
the present situation of the world, 
especially in regard to East-West rela- 

A. Those 40 years have seen some 
remarkable changes in the world. One of 
the most remarkable has been the recon- 
ciliation between former adversaries, in- 
cluding the United States and Japan. 
Today Japan and the United States are 
close partners and good friends. We 
share the common values of freedom 
and democracy. We are bound by a 
security treaty. Unfortunately, Japan, 
the United States, and other democ- 
racies continue to be confronted by a 
system that stands for different values. 

Q. Secretary of State [George P.] 
Shultz will meet Soviet Foreign 
Minister [Andrei A.] Gromyko on 
January 7 and 8 in Geneva. Could you 
tell us something about your expecta- 
tions of the meeting? What do you 
hope to agree to at this specific 

meeting? Six major items on the agen- 
da of the U.S. -Soviet negotiations will 
be the status of space, strategic, 
intermediate-range, conventional, and 
chemical weaponry, as well as certain 
confidence-building measures. How 
could these items be interrelated with 
each other in the framework of an um- 
brella formula in the negotiations to 
follow up the Shultz-Gromyko 

A. I was encouraged that the 
Soviets agreed to resume a dialogue on 
arms control issues and that we will 
have the meeting in Geneva to try to get 
the process moving again. 

But we must temper our expecta- 
tions with realism. A 2-day meeting can- 
not solve the complicated issues before 
us. We hope it will be a constructive 
beginning for further detailed negotia- 
tions. But it isn't an easy job. Only time 
will tell how rapidly the process moves, 
or in which specific framework. 

Meaningful progress on arms control 
has a high priority in this Administra- 
tion. We have been working long hours 
to prepare for Secretary Shultz's 
meeting with Mr. Gromyko. The Secre- 
tary will enter those meetings with con- 
crete suggestions on a full range of 

March 1985 


arms control issues. We hope the 
Soviets will show a similar constructive 

The fundamental objective of our 
talks with the Soviets has to be kept in 
mind. We are not looking for an agree- 
ment for its own sake. We are striving 
to improve stability, reduce the risk of 
war, and to lower the levels of nuclear 
arms. That involves hard bargaining on 
issues of great mutual concern. The 
United States is committed to conduct 
the process seriously and creatively. 

Q. Would you consider a summit 
meeting with General Secretary 
[Konstantin U.] Chernenko before the 
completion of arms control talks? If 
so, what preconditions are necessary? 

A. As long ago as last June, I said 
that I was willing to meet at any time. 
Since then, I've met with Foreign 
Minister Gromyko, and our discussions 
were useful. The Soviets say they would 
want a very carefully prepared agenda 
for any summit meeting. That makes 
sense to me. In the past, meetings that 
there were not carefully prepared often 
led to great expectations and great 
disappointments, and I don't think we 
ought to go into something of that kind. 

Q. In what way may the Western 
allies, including Japan, support suc- 
cessful U.S. -Soviet negotiations? Do 
you support independent action on the 
part of the allies for relaxation of ten- 
sions with the U.S.S.R. and the 
Eastern European nations? 

A. The United States is fully com- 
mitted to reducing the threat of war. At 
the Williamsburg summit the Western 
leaders were united in their commitment 
to arms reductions and continued 
thorough and intensive consultations. 
Further, we noted that security is in- 
divisible and must be approached on a 
global basis. Prime Minister [Yasuhiro] 
Nakasone was a key participant in the 
discussions that led up to this united 

Alliance solidarity behind NATO's 
1979 dual track decision on INF 
[intermediate-range nuclear forces] 
modernization has prevented the Soviets 
from unilaterally dictating Western 
security policy. This solidarity stems 
from the extensive consultations which 
the United States conducts with its 
European and Japanese allies on arms 
control issues. These consultations have 
assured a consensus among the allies 
which is essential in dealing with the 
Soviets on these vital issues. 

Q. How do you view the develop- 
ment of current Sino-Soviet relations? 
What will be the impact of the forth- 
coming US. -Soviet arms control talks 

on the tripartite relations between the 
U.S., U.S.S.R., and China? 

A. We welcome recent efforts by the 
Chinese and the Soviets to put their 
relations on a more normal footing. Dif- 
ferences between the Soviet Union and 
China run very deep, however, and 
center on three major problems: massive 
Soviet troop developments along the 
Chinese border with the Soviet Union 
and Mongolia; Soviet support for the 
Vietnamese invasion of Cambodia; and 
the Soviet invasion of Afghanistan. 
These are serious impediments, it seems 
to me. The Chinese are very positive 
about our forthcoming arms talks with 
the Soviets. They want these discussions 
to bring a genuine reduction of nuclear 
weapons. They don't want the Soviets 
merely to redeploy their missiles, from 
west to east. We agree. 

Q. As you prepare to receive Prime 
Minister Nakasone in Los Angeles in 
early January, we would like to ask 
about your fundamental assessment of 
U.S. -Japan relations today. For the 
promotion of friendly and constructive 
relations, what do you expect of 
Japanese policy in economic matters, 
defense, and foreign affairs? 

A. I'm looking forward to meeting 
again with my friend and your Prime 
Minister. We've had excellent meetings 
before. My visit to your country when he 
was my host was just wonderful. I think 
U.S. -Japanese relations are as good as 
they have ever been. When I meet with 
the Prime Minister on January 2, I know 
that we will begin our talks on the basis 
of our common desire to make the 
U.S. -Japan relationship even closer. I 
don't think there's any confusion about 
what it will take to succeed. Econom- 
ically, we need to work hard to continue 
and enhance the progress made after 
our talks in Tokyo in November 1983. 
We have made progress in our security 
relationship, which will continue to 
develop to the benefit of both sides. But 
it is in foreign affairs that the real pay- 
off of close U.S. -Japan relations can in- 
creasingly be found. As our ability to 
cooperate and coordinate our policies in- 
creases, so does the scope of what we 
can accomplish together. Our interna- 
tional cooperation will reflect our ability 
to handle problems in our bilateral rela- 
tionship, including trade issues. It is my 
hope that as leading democracies and as 
the leading free world economies, Japan 
and America will be able to provide solu- 
tions by putting our heads — and our 
hearts — together in a partnership for 
the cause of good. 

Q. Cooperation between the 
United States and Japan in a Pacific 
Basin Initiative is said to be a leading 
topic of discussion in the upcoming 
Los Angeles meeting. Could you 
elaborate on your ideas about its 

A. Although the United States has 
long been a two-ocean nation, in the 
past we focused most of our attention 
on our Atlantic coast because of our 
historic relationship with Europe. But 
during the past decade or so, the growth 
of democracy and the dynamic economic 
development of the Pacific region also 
have earned our admiration and our 
very close attention. As a result, while 
Europe certainly remains as vital as 
ever to us, a new perspective has 
emerged toward the Pacific. Japan, of 
course, plays a key role in this new 
American perspective. Both our coun- 
tries are prepared to devote our 
resources and energies to seeking ways 
to cooperate with our neighbors in the 
Pacific. But it is important that we not 
be rushed in our eagerness to get 
started. Pacific Basin cooperation, in 
whatever form it eventually emerges, 
will not be successful and will not last 
unless it has the full support of all our 
Pacific neighbors, and unless there is 
benefit for all. The Pacific Basin will be 
a topic of conversation between the 
Prime Minister and myself in Los 
Angeles, but it is too soon to talk about 
or expect any specific announcements or 

Q. The United States trade deficit 
with Japan may reach $35 billion this 
year. Renewed calls for import sur- 
charges are coming from Capitol Hill 
and industry circles. Will your present 
position on free trade change in 
response to calls for the protection of 
U.S. industries? And what are your 
expectations on Japan in light of the 
current deficit? For instance, as yet 
there are several unsettled matters 
concerning trade and the opening of 
the Japanese market: (1) the expansion 
of voluntary export restraints on 1985 
automobiles, (2) reduction of tariff 
rates on wood products, and (3) total 
liberalization of agricultural products. 
We would appreciate any thoughts you 
might give us about specific ap- 
proaches to settling these and other 
trade issues. 

A. I believe that free trade is a 
powerful force for progress and peace. 
The winds of commerce carry oppor- 
tunities that help nations grow and 
bring citizens of the world closer 


Department of State Bulletin 


ether, [ncreased trade spells more 
jobs, higher earnings, better products, 
less inflation, and more cooperation. The 
freer the flow of world trade, the wider 
the benefits of economic progress. 

Nowhere is free trade more impor- 
tant than in America's commercial ties 
with Japan — our largest overseas 
trading partner. And we are Japan's 
most important market. This year $85 
billion in goods and services is flowing 
across the Pacific between our two na- 
tions. But the potential would be even 
greater if it were not for some trade 
barriers Japan still maintains which 
reduce competitive foreign imports. 

We've worked hard to encourage 
Japan to open its domestic market fully 
to foreign products. We want American 
companies to have the same opportunity 
to sell their goods and services and to 
invest in Japan that your companies 
already enjoy in our market. You have 
responded by reducing some trade bar- 
riers and we appreciate these measures. 
The efforts by the Japanese Government 
to open capital markets for foreign par- 
ticipation and to liberalize the yen are 
also important steps in the right direc- 

But many U.S. companies still can- 
not compete in Japan on an equal basis. 
High tariffs stymie our efforts to sell 
competitive U.S. exports like processed 
forest products. While there has been 
some liberalization of agricultural 
quotas, these should be eventually 
eliminated so that Japanese consumers 
have the chance to buy U.S. beef, citrus, 
and other farm products in quantities 
and at prices freely set in the 
marketplace. And I hope that the 
transformation of Japan's government 
telecommunications monopoly into a 
private company will allow U.S. sup- 
pliers of these products a fair shot at 
your market, just as Japanese com- 
panies already have here. Your question 
also refers to Japan's voluntary export 
restraints on automobiles which expires 
at the end of March. I think that it is 
premature for me to make any comment 
on this, and, in any case, this is a deci- 
sion for the Japanese Government to 

On the trade deficit with Japan — it 
will approach $35 billion by the end of 
the year — I realize there is no easy 
answer to this problem, but the sheer 
size of the deficit has generated growing 
protectionist sentiment in this country. 
Therefore, I urge the Japanese Govern- 
ment and people to move even more 
quickly to open Japan's market to com- 
petitive foreign products. If this is done, 

our transpacific trade relations can con- 
tinue to expand and flourish to the 
mutual benefit of our two countries. 

Q. With the Olympic Games 
scheduled in Seoul in 1988, the Korean 
Peninsula may become a focus of in- 
ternational attention. What is your 
evaluation of the current state of af- 
fairs on the peninsula as the date ap- 
proaches? Do you have any initiatives 
in mind to maintain peace there? What 
role do you expect the neighboring na- 
tions of China, the U.S.S.R., and 
Japan to play in order to reduce ten- 
sion on the peninsula? 

A. There has been considerable ten- 
sion on the Korean Peninsula since the 
North Korean invasion of the South in 
1950. Such tension has at times grown 
ever more serious, as, for example, after 
the North Korean bombing in Rangoon 
in October of 1983, which almost killed 
President [Doo Hwan] Chun and did kill 
several of his key advisers. However, we 
have seen welcome signs of tension 
reduction between the two Korean 
states recently. Talks on economic 
cooperation and Red Cross talks on such 
matters as family unification have taken 
place, and representatives of both 
Korean Governments will meet again in 
January to discuss these topics. I think 
that peace initiatives or tension reduc- 
tion measures, like the economic and 
Red Cross talks, must properly come 
from the two Korean Governments 
themselves. They must be the major in- 
terlocutors in any inter-Korean dialogue, 
but Japan, China, the U.S.S.R., and the 
United States all have an interest in see- 
ing that peace is preserved and that ten- 
sion on the peninsula is reduced. 

Q. Are you planning any initiatives 
in your second term for the solution of 
problems in these specific areas of the 
world? What contribution do you ex- 
pect from the allied nations, including 
Japan, to help solve regional conflicts? 

A. One way to solve regional con- 
flicts is to convince the parties to the 
conflict that they have more to gain by 
seeking peace. The United States is 
committed to the peace process in the 
Middle East, Central America, southern 
Africa, and elsewhere. 

Another way to deal with regional 
tensions is to create an environment of 
political stability and economic develop- 
ment that deals with the source of the 
problem. Japan has increasingly con- 
tributed to this process throughout the 
world through its growing aid programs. 
I hope Japan will continue to exercise a 
positive and increasingly visible 
diplomatic and economic role in the 
Asian region and throughout the world. 

Q. Could you elaborate on your 
principal ideas about reducing the 
United States budgetary deficit and 
the high interest rates which are also 
matters of concern to your allies? 
Please comment on your position dur- 
ing the coming term. 

A. As a result of our economic 
policies, millions of jobs have been 
created, inflation has been cut sharply, 
interest rates reduced, and in general 
the U.S. economy has enjoyed a strong, 
sustained recovery. In turn, America's 
economic return has helped the 
economies of our trading partners, in- 
cluding Japan. 

Let's look at the record. The United 
States should enjoy a 4% growth rate 
next year. Consumer incomes are rising 
at a steady pace and consumer confi- 
dence is strong. Robust business spend- 
ing, spurred by our 1981 tax cuts, 
helped propel the current expansion, and 
prospects for continued strength in 
capital spending remain favorable. Infla- 
tion will remain low and under control in 
1985. This news is good for the United 
States as well as its trading partners 
like Japan. 

To ensure the strength and durabili- 
ty of economic expansion for the longer 
term, we need to get the Federal deficit 
and the growth in Federal outlays under 
better control. With the help of the Con- 
gress, we are determined to do so. My 
goal is to reduce the deficit to $100 
billion by FY 1988. 

There has been much critisicm of the 
strength of the dollar by many of our 
allies. Critics have charged that the 
dollar is substantially overvalued 
because of high U.S. interest rates 
resulting from large budget deficits. 
They contend that the high dollar 
threatens the global recovery and the 
United States must "correct" its value. 

These arguments are not supported 
by the facts. While the levels of interest 
rates have periodically played an impor- 
tant role in determining exchange rates, 
this has not been generally the case dur- 
ing this Administration. The improved 
U.S. business climate and the sharp 
drop in our inflation are probably the 
key to the dollar's performance. I am 
sympathetic to the view that the value 
of the dollar is high, but I disagree that 
it is "overvalued." Such a view implies 
that we can calculate the "right" rate in- 
dependent of market forces. I believe 
that we cannot do so. 

March 1985 


Q. The forthcoming Bonn summit 
marks the 40th anniversary of the end 
of World War II. What are your 
thoughts on the development of this 
organization as it convenes for the 
eleventh time? What will be your basic 
position in the forthcoming talks? 

A. The annual economic summits are 
a very useful opportunity for the leaders 
of the seven main industrialized coun- 
tries to explain to each other their 
perspectives and plans for their own 
economies and their participation in the 
world economy. In addition, it is an oc- 
casion to review the year ahead. Sum- 
mits are not and cannot be meetings at 
which we draw up detailed blueprints 
for solving the world's problems. 
Whenever that was tried in the past, it 
failed. But a summit can and does give 
each participant a clearer understanding 
of how others see current problems and 
the tasks before us, so that we can bet- 
ter determine how we should be moving, 
both separately and together, to deal 
most effectively with our common 

It is too early to say what will be the 
main themes of the Bonn summit. How- 
ever, we have much unfinished business 
still before us. We need to reaffirm our 
determination to promote sustainable 
noninflationary growth in each of our 
economies. We need to move rapidly to 
begin a new round of trade negotiations 
as the best assurance against resurgent 
protectionist pressures. We need to con- 
tinue the policies we outlined at the 
Williamsburg and London meetings to 
deal in the longer term with the debt 
problem and the need to integrate the 
developing countries more effectively 
into the open world trade and finance 
systems. As with previous economic 
summits, the Bonn summit will provide 
an opportunity for us to discuss infor- 
mally the more important international 
political issues facing all our countries, 
of which the search for meaningful arms 
reduction is one of the most pressing. In 
this search, I'm proud to know that 
Japan is our ally and friend. 

'Text from Weekly Compilation of 
Presidential Documents of Dec. 31, 1984. 

U.S. Government and Business: 

Our Common Defense 

Against Terrorism 

by Secretary Shultz 

Address before the American Society for 

Industrial Security in Arlington, Virginia, 

on February 1±, 1985 1 

International terrorism has rapidly 
become one of the gravest challenges to 
American interests around the world. In 
the Middle East, in Latin America, and 
in Western Europe, we have suffered 
heavy casualties, and the threat has not 

Terrorism poses a foreign policy 
problem of immense proportions, and as 
a foreign policymaker I consider the 
reduction and eventual eradication of 
terrorism one of our most important 
goals. But I also see the terrorist threat 
on a much more personal level. A 
Secretary of State is obviously responsi- 
ble for helping the President set the 
direction of American foreign policy. 
But he is also responsible for the health, 
safety, and well-being of the thousands 
of men and women who work for the 
State Department both here and 
overseas — and not only the State 
Department but those assigned overseas 
from other agencies of the government; 
and not only employees of government 
but private citizens working or visiting 
overseas. I feel that responsibility 

When a terrorist attack kills or in- 
jures our people abroad, it is a loss for 
our foreign policy, but it is even more a 
deeply personal loss. Some may think 
that deaths and injuries at the hands of 
terrorists are the cost of doing business 
in some regions. But if anyone stood in 
the bombed-out ruins of the courtyard at 
our Beirut Embassy annex, as I did, and 
saw firsthand the terrible destruction 
wreaked by terrorism, they would agree 
that the price is unacceptable and in- 
tolerable. Clearly, we cannot retreat in 
the face of the terrorist threat, but, just 
as clearly, we have to do more to pro- 
tect our people. 

Part of the answer comes from 
understanding the nature of the ter- 
rorist phenomenon. We have learned a 
great deal about the scope and nature of 
international terrorism in recent years, 
though our education has been painful 
and costly. We have learned about the 
terrorists themselves, their supporters, 
their international links, their diverse 
methods, their underlying motives, and 
their eventual goals. We have learned 
that terrorism is, above all, political 
violence. What once may have seemed 
the random, senseless, violent acts of a 
few crazed individuals has come into 
clearer focus. 

Today, we are confronted with a 
wide assortment of terrorist groups 
which, alone or in concert, orchestrate 
acts of violence to achieve distinctly 
political ends. Their stated objectives 
may range from separatist causes to 
revenge for ethnic grievances to social 
and political revolution. Their techniques 
may be just as diverse: from planting 
homemade explosives in public places to 
suicide car bombings to kidnapings and 
political assassinations. 

But the essential method of all ter- 
rorists is the same: they are trying to 
impose their will by force — a special 
kind of force designed to create an 
atmosphere of fear. The terrorists want 
people to feel helpless and defenseless; 
they want to undermine people's faith in 
their government's capacity to protect 
them and thereby to undermine the 
legitimacy of the government itself, or 
its policies, or both. The terrorists profit 
from the anarchy caused by their 
violence. They succeed when govern- 
ments change their policies out of in- 


Department of State Bulletin 


Devising an Effective 

Strategy To Deal With Terrorism 

Over the years, the pattern of terrorist 
violence has become increasingly clear. 
It is an alarming pattern, but it is 
something that we can identify and, 
therefore, a threat that we can devise 
concrete measures to combat. The 
knowledge we have accumulated about 
terrorism can provide the basis for a 
coherent strategy to deal with it, if we 
have the will to turn our understanding 
into action. 

An effective strategy must incor- 
porate many elements. I have spoken on 
other occasions about the need to go 
beyond a purely passive defense to con- 
sider means of active prevention, 
preemption, and retaliation. Our goal 
must be to prevent and deter future ter- 
rorist acts, and experience has taught us 
over the years that one of the best 
deterrents to terrorism is the certainty 
that swift and sure measures will be 
taken against those who engage in it. 

We have also recognized the need 
for a broader international effort. Ter- 
rorism poses a direct threat not only to 
Western strategic interests but to the 
very moral principles that undergird 
Western democratic society. The 
enemies of the West are united. So, too, 
must the democratic countries be united 
in a common defense against terrorism. 
The leaders of the industrial democ- 
racies, meeting at the London summit 
last June, agreed in a joint declaration 
that they must redouble their coopera- 
tion against terrorism. There has been 
followup to that initial meeting, and the 
United States is committed to advancing 
the process in every way possible. Since 
we, the democracies, are the most 
vulnerable, and our strategic interests 
are the most at stake, we must act 
together in the face of common dangers. 

Sanctions, when exercised in concert 
with other nations, can help to isolate, 
weaken, or punish states that sponsor 
terrorism against us. Too often, coun- 
tries are inhibited by fear of losing com- 
mercial opportunities or fear of provok- 
ing the bully. Economic sanctions and 
other forms of countervailing pressure 
impose costs and risks on the nations 
that apply them, but some sacrifices will 
be necessary if we are not to suffer even 
greater costs down the road. Some coun- 
tries are clearly more vulnerable to ex- 
tortion than others, but surely this is an 
argument for banding together in 
mutual support, not an argument for ap- 

Even these steps, however, will not 
be enough. For until the day comes 
when we have banished the scourge of 

terrorism from the modern world, we 
will continue to face threats. We must, 
therefore, summon all our resources, all 
our knowledge, and all our will to find 
ways to protect ourselves, our installa- 
tions, and the people, both in govern- 
ment and in the private sector, who 
represent America abroad. We must 
take every precaution to provide the 
safest possible environment for our 
citizens who live and work overseas. 
And I believe there is much that the 
American Government and American 
businesses can do together to meet this 

to analyze and report on terrorist 
threats. We have expanded our data 
facilities to keep on record biographical 
information on individual terrorists and 
terrorist groups, the kinds of weapons 
they use, and their modus operandi. And 
we have developed better and faster 
procedures for our posts in the field to 
gather and report information on ter- 
rorist activities. 

We have taken great strides toward 
bringing our installations in threatened 
areas up to the standards we believe 
necessary to protect our people. All our 
posts have done intensive reviews of 

Clearly, we cannot retreat in the face of the ter- 
rorist threat, . . . we have to do more to protect our 

Most of you here today have the 
great responsibility of providing security 
to American businesses around the 
world. As a former business executive 
myself, I know how important it is that 
your people abroad have some degree of 
confidence in their safety. Without that 
confidence, doing business effectively is 
practically impossible. And when 
America's businesses have a hard time 
doing business abroad, all of America 
suffers. Our nation loses jobs and in- 
come. Our balance of payments is 
adversely affected. And, not least impor- 
tant, the constructive ties that American 
business creates with our friends and 
allies around the world are eroded. 

U.S. Measures To Enhance Security 

The problems that you face are not very 
different from those I have faced as 
Secretary of State. In fact, I often feel 
like a security executive myself. At the 
State Department, we have made en- 
hancing the security of our personnel 
and installations abroad a top priority. 
I'd like to take a few moments to outline 
for you some of the measures we are 
taking to enhance the security of our 
posts and personnel overseas. 

One thing we have learned over the 
years is that defense against terrorists 
depends to a great extent on timely and 
accurate information and intelligence. 
We have, therefore, begun to augment 
and improve our capabilities in this vital 
area. We have strengthened our ability 

their security needs, and these reviews 
have been the basis for speedy action. 
We have made immediate improvements 
at 23 high-threat posts. We are planning 
to construct 13 new office buildings that 
will measure up to the latest security 
standards. In addition, we have con- 
tracted out to private firms longer term 
improvements at 35 of our posts. Con- 
struction at these posts will begin this 
spring. As we move ahead on all these 
projects, we will continue to test and 
evaluate new technologies for enhancing 
physical security. Finally, we will be 
adding over 400 new security personnel, 
including Marine security guards, to our 
posts around the world. 

Obviously, we have been forced to 
spend more money to protect our people 
abroad, and the Congress, on a bipar- 
tisan basis, has been enormously helpful 
to these efforts. From 1979 to 1983 the 
Congress tripled the State Department's 
authorization for security. Last year the 
Congress authorized a $361 million 
security supplemental, which is paying 
for the bulk of the measures we are now 
taking. In 1985 we expect to spend more 
for security than we did in all of the 
preceding 5 years combined. We are 
grateful for this congressional support. 

Protecting ourselves against ter- 
rorism, however, will require more than 
these tangible security improvements. 
We must also take steps to educate 
ourselves and our personnel abroad, to 
raise our awareness of the terrorist 
threat and what needs to be done to 

March 1985 



counter it. I myself meet every morning 
with Ambassador Oakley [Director of 
the Office for Counter-terrorism and 
Emergency Planning] and our security 
and intelligence officials to stay abreast 
of the very latest information on ter- 
rorist activities and to discuss ways of 
improving security. But all our person- 
nel must learn to adapt to the new and 
dangerous circumstances that the ter- 
rorist violence has created. The State 
Department is now developing a com- 
prehensive multidisciplinary program 
using our security, medical, training, 
and public affairs officials as educational 
resources. As long as the terrorist 
threat persists, all our people must be 
vigilant and ready to respond to any 
crisis quickly and effectively. 

In July I convened a blue-ribbon 
panel on overseas security chaired by 
retired Admiral Bobby Inman. I asked 
this panel to look into the security of our 
Embassies abroad and to tell us, in 
essence, how much security is enough. 
One of the specific questions posed to 
this panel was: "What responsibility does 
the U.S. Government have for the pro- 
tection of American business people 

For a number of years now, we have 
worked informally with many American 
firms on local security issues. The main 
players have been the regional security 
officers at overseas posts and our 
Threat Analysis Group here in 
Washington. This has been a good and 
growing relationship. But we would like 

We must also take steps to educate ourselves and 
our personnel abroad, to raise our awareness of the 
terrorist threat and what needs to be done to 
counter it. 

State Department officers around 
the world in many ways represent the 
front line of the U.S. Government. But 
the men and women who work for 
American businesses abroad are also on 
the front line, and their safety and well- 
being are also at the forefront of our 
concern, as I know they are of yours. 

Pooling the Resources of 
the Public and Private Sectors 

I'd like to turn now to the ways Ameri- 
can Government and American business 
can pool their energies and resources to 
enhance the security of all Americans 
overseas, whether they represent the 
public or the private sector. 

Obviously, terrorism poses the same 
kind of difficulties and dangers to 
businessmen abroad as to government 
officials. And the security measures 
needed to protect businesses are also 
substantially the same. There is much 
room, therefore, for collaboration. We 
can share information on terrorist ac- 
tivities and on the new technologies for 
enhancing security. We can coordinate 
our security efforts overseas. In short, 
we can meet the threat together. 

to put it on a more formal footing and 
make it available to more American 
firms and organizations. 

In this regard, I am pleased to an- 
nounce today the formation of a new 
joint venture between the State Depart- 
ment and the private sector: the 
Overseas Security Advisory Council. The 
members of this council will come from 
a wide range of American businesses 
that operate abroad, as well as from the 
State Department, American law en- 
forcement agencies, and other foreign 
policy agencies. Its goal is to establish a 
continuing liaison between officials in 
both the public and private sector in 
charge of security matters; to provide 
for regular exchanges of information on 
developments in the security fields; and 
to recommend plans for greater opera- 
tional coordination between the govern- 
ment and the private sector overseas. 
The creation of this council marks an im- 
portant step forward. There are many 
ways our security officers overseas can 
assist businesses abroad with emergency 
communications, information about 
specific threat conditions, and even ad- 
vice on the best locales for residences 
overseas. I am sure that, by working 
together to enhance security, we can be 
more effective in saving lives and reduc- 
ing the dangers of doing business 

Obviously, all our efforts will not 
eliminate the threat. That will require 
time and a broad, consistent strategy 
combining elements of defense, 
response, and international cooperation. 
But we must stand firm. So long as ter- 
rorism continues to be a grave problem, 
we must not waver or bow to terrorist 
intimidation. The United States cannot 
allow the actions of terrorists to affect 
our policies or deflect us from our goals. 
When terrorist intimidation succeeds in 
changing our policies, when it forces 
businesses to close down overseas, we 
hand them a victory; this only opens the 
door to more terrorism. It shows that 
terrorism works; it emboldens those who 
resort to it; and it encourages others to 
join their ranks. 

If we remain firm, we can look 
ahead to a time when terrorism will 
cease to be a major factor in world af- 
fairs. But we must face the challenge 
with realism, determination, and 
strength of will. Not so long ago we 
faced a rash of political kidnapings and 
Embassy takeovers. These problems 
seemed insurmountable. Yet, through in- 
creased security and the willingness of 
governments to resist terrorist demands 
and to use force when appropriate, such 
incidents have become rare. In recent 
years, we have also seen a decline in the 
number of airline hijackings— once a 
problem that seemed to fill our news- 
papers daily. Tougher security measures 
and closer international cooperation 
have clearly had their effect. 

I have great faith that we do have 
the will, and the capability, to act 
decisively against this threat. It is really 
up to us. We must work together and 
apply ourselves to the task of ensuring a 
safer future. 

1 Press release 14. 


Department of State Bulletin 


The Future of American Foreign Policy: 
New Realities and New Ways of Thinking 

Secretary Shultz's statement before 
the Senate Foreign Relations Committee 
on January 31, 1985. l 

I am honored to lead off this important 
series of hearings on the future of 
American foreign policy. This is an 
auspicious moment: the beginning of a 
new presidential term, of a new Con- 
gress, and of the term of a distinguished 
new chairman [Senator Richard G. 
Lugar]. It is, for many reasons, a time 
of great promise and opportunity for the 
United States in world affairs. 

Therefore, I commend the chairman 
for focusing the attention of the Con- 
gress and the American people on the 
fundamental issues we will face— not 
just the day-to-day issues that make the 
news but the underlying trends at work 
and the most important goals we 

My presentation today is thus of a 
special kind. I would like to step back a 
bit and look at the present situation in 
perspective— the perspective of recent 
history, the perspective of the intellec- 
tual currents of our time, and the 
perspective of America's ideals and their 
relevance to the world's future. 

strong commitment to the freest possi- 
ble flow of trade and investment— re- 
placed the unbridled economic na- 
tionalism that had helped undermine in- 
ternational peace between the wars. 

But history never stops. The post- 
war order, too, evolved and changed its 
shape. The breakup of colonial empires 
brought scores of new states onto the 
world stage. The so-called Third World 
became the scene of a growing number 
of local and regional conflicts. America, 
after Vietnam, retreated for a time from 
its active role of leadership. Europe, 
China, and Japan came into their own 
again as important economic and politi- 
cal actors; the energy crisis dramatized 
both the diffusion of economic power 
and the vulnerability of the postwar eco- 
nomic system. The United States and 
the Soviet Union attempted a political 
dialogue to stabilize relations and control 
nuclear arms; then the dialogue broke 
down under the weight of the Soviet 
military buildup and geopolitical offen- 

Today, the cycle is turning again. 
Change is constant. America has re- 
covered its strength and self-confidence. 

trends in accordance with our ideals and 
interests; to help build a new structure 
of international stability that will ensure 
peace, prosperity, and freedom for com- 
ing generations. This is the real chal- 
lenge of our foreign policy over the 
coming years. 

What are the forces of change? And 
what are the possible elements of a new 
and more secure international system? 

Relations Between the Superpowers 

Relations between the superpowers re- 
main crucial, even though their political 
predominance is less than it was a few 
decades ago. Over 50 years' experience 
of U.S. -Soviet relations has given us by 
now a mature understanding of what is 
possible and what is not possible in this 
relationship. Yet conditions are evolving 
and the problem remains a conceptual 

True friendship and cooperation will 
remain out of reach so long as the 
Soviet system is driven by ideology and 
national ambition to seek to aggrandize 
its power and undermine the interests of 
the democracies. We must resist this 

The Changing International System 

Soon after the dawn of the nuclear age, 
Albert Einstein observed that every- 
thing had changed except our ways of 
thinking. Even so dramatic a develop- 
ment as the nuclear revolution took a 
long time to be fully understood; how 
much longer has it usually taken to 
understand the implications of more sub- 
tle, intangible historical changes taking 
place around us. 

Nineteen hundred and forty-five, 
everyone knows, marked a major turn- 
ing point. An international system that 
had lasted for more than a century had 
broken down under the weight of two 
world wars and a great depression. An 
international order centered on Europe 
and dominated by Europe was replaced 
in the early postwar period by a new ar- 
rangement—a world dominated by two 
new superpowers, torn by ideological 
conflict, and overshadowed by nuclear 
weapons that made a new world war 
potentially suicidal. At the same time, 
an integrated international economic 
system established by America's initia- 
tive—based on the dollar and on a 

We must never let ourselves be so wedded to im- 
proving relations with the Soviets that we turn a 
blind eye to actions that undermine the very foun- 
dation of stable relations. . . . 

Power continues to be dispersed and the 
structure of political relations more com- 
plex, even as the interdependence of 
states increases. And as we head toward 
the 21st century, is a stable new pattern 
of international relations emerging? Ein- 
stein's observation takes on new rele- 
vance: our ways of thinking must adapt 
to new realities; we must grasp the new 
trends and understand their implica- 

But we are not just observers; we 
are participants, and we are engaged. 
America is again in a position to have a 
major influence over the trend of 
events— and America's traditional goals 
and values have not changed. Our duty 
must be to help shape the evolving 

Soviet power drive vigorously if there is 
to be any hope for lasting stability. At 
the same time, in the thermonuclear age 
the common interest in survival gives 
both sides an incentive to moderate the 
rivalry and to seek, in particular, ways 
to control nuclear weapons and reduce 
the risks of war. We cannot know 
whether such a steady Western policy 
will, over time, lead to a mellowing of 
the Soviet system; perhaps not. But the 
West has the same responsibility in 
either case: to resist Soviet encroach- 
ments firmly while holding the door 
open to more constructive possibilities. 

March 1985 



After the failure of their political 
campaign to divide NATO, their propa- 
ganda to thwart deployment of inter- 
mediate-range nuclear missiles in 
Europe, and their boycott of talks, the 
Soviets have now returned to the arms 
control dialogue. We welcome this. My 
meeting in Geneva with Soviet Foreign 
Minister Gromyko was a constructive be- 
ginning of what the United States hopes 
will be a fruitful negotiation. 

My able interlocutor, Andrei 
Gromyko, is, in a sense, the living em- 
bodiment of some of the Soviet Union's 
great advantages — continuity, patience, 
the ability to fashion a long-term 
strategy and stick to it. When the 
Soviets shift tactics, it is more often 
than not an adjustment to objective con- 
ditions without basic diversion from 
their long-term aims. 

The democracies, in contrast, have 
long had difficulty maintaining the same 
consistency, coherence, discipline, and 
sense of strategy. Free societies are 
often impatient. Western attitudes have 
fluctuated between extremes of gloom 
and pessimism, on the one hand, and 
susceptibility to a Soviet smile on the 
other. Our ways of thinking have tended 
too often to focus either on increasing 
our strength or on pursuing negotia- 
tions; we have found it hard to do both 
simultaneously — which is clearly the 
most sensible course and probably the 
only way we can sustain either our 
defense programs or our ability to 

In the last 4 years, the underlying 
conditions that affect U.S. -Soviet rela- 
tions have changed dramatically. A 
decade or so ago, when the United 
States was beset by economic diffi- 
culties, neglecting its defenses, and hesi- 
tant about its role of leadership, the 
Soviets exploited these conditions. They 
continued their relentless military build- 
up; they and their clients moved more 
boldly in the geopolitical arena, inter- 
vening in such places as Angola, Cam- 
bodia, Ethiopia, and Afghanistan, believ- 
ing that the West was incapable of re- 
sisting. They had reason for confidence 
that what they call the global "correla- 
tion of forces" was shifting in their 

Today, the West is more united than 
ever before. The United States is re- 
storing its military strength and eco- 
nomic vigor and has regained its self- 
assurance; we have a President with a 
fresh mandate from the people for an 
active role of leadership. The Soviets, in 
contrast, face profound structural eco- 
nomic difficulties, a continuing succes- 
sion problem, and restless allies; its 
diplomacy and its clients are on the de- 
fensive in many parts of the world. We 
have reason to be confident that the 
"correlation of forces" is shifting back in 
our favor. 

Nevertheless, history won't do our 
work for us. The Soviets can be counted 
upon periodically to do something, some- 
where, that is abhorrent or inimical to 
our interests. The question is how the 

A strong Western deterrence posture is the most 
solid basis for engaging the East in constructive 

It is vital, for example, to carry 
through with the modernization of our 
strategic forces — in particular, the MX— 
to avoid undercutting our negotiators 
just as they begin the quest for real 
reductions in nuclear arms. The Soviets 
will have little incentive to negotiate 
seriously for reductions to lower, equal 
levels if we hand them on a silver plat- 
ter their long-cherished goal of uni- 
latercU American reductions. Likewise, 
e pursue such agreements, we are 
d to bear in mind the Soviets' 
. of violating previous accords and 
• on effective verification provi- 
any new agreements. 

West can respond in a way that could 
help discipline Soviet international be- 
havior but does not leave our own 
strategy vulnerable to periodic disrup- 
tion by such external shocks. We must 
never let ourselves be so wedded to im- 
proving relations with the Soviets that 
we turn a blind eye to actions that 
undermine the very foundation of stable 
relations; symbolic responses to out- 
rageous Soviet behavior have their 
place, and so do penalties and sanctions. 
At the same time, experience shows we 
cannot deter or undo Soviet geopolitical 
encroachments except by helping, in one 
way or another, those resisting directly 
on the ground. And many negotiations 

and endeavors we undertake with the 
Soviets serve mutual interests— indeed, 
they all should. 

This leaves us with tough choices. 
Whether important negotiations ought 
to be interrupted after some Soviet out- 
rage will always be a complex calcula- 
tion. When the Soviets shot down the 
Korean Air Lines passenger plane in 
1983, President Reagan made sure the 
world knew the full unvarnished truth 
about the atrocity; nevertheless, he also 
sent our arms control negotiators back 
to Geneva because he believed that a 
reduction in nuclear weapons was a 
critical priority. 

In short, our "way of thinking" must 
seek a sustainable strategy geared to 
American goals and interests, in the 
light of Soviet behavior but not just a 
reaction to it. Such a strategy requires a 
continuing willingness to solve problems 
through negotiation where this serves 
our interests (and presumably mutual in- 
terests). Our leverage will come from 
creating objective realities that will give 
the Soviets a growing stake in better 
relations with us across the board: by 
modernizing our defenses, assisting our 
friends, and confronting Soviet 
challenges. We must learn to pursue a 
strategy geared to long-term thinking 
and based on both negotiation and 
strength simultaneously, if we are to 
build a stable U.S. -Soviet relationship 
for the next century. 

The intellectual challenge of a new 
era faces us in a related dimension, 
namely arms control. The continuous 
revolution in technology means that the 
strategic balance— and the requirements 
of deterrence— are never static. Unfortu- 
nately, conventional ways of thinking 
about many of these questions continue 
to lag behind reality. 

For decades, standard strategic doc- 
trine in the West has ultimately relied 
on the balance of terror— the confronta- 
tion of offensive arsenals by which the 
two sides threaten each other with mass 
extermination. Certainly deterrence has 
worked under these conditions; never- 
theless, for political, strategic, and even 
moral reasons, we should seek to do bet- 
ter than the proposition that our defense 
strategy must rely on offensive threats 
and must leave our people unprotected 
against attack. The Soviets, for their 
part, have always attached enormous 
importance to strategic defense, in- 
cluding not only air defense and civil 
defense but a deployed and modernized 
antiballistic missile system around 
Moscow— and intensive research into 
new defensive technologies. 


Department of State Bulletin 


The pace of technological advance 
now opens possibilities for new ways of 
strategic thinking— never an easy proc- 
ess. The vehemence of some of the 
criticism of the President's Strategic 
Defense Initiative (SDI) seems to come 
less from the argument over technical 
feasibility— which future research will 
answer one way or another in an objec- 
tive manner— than from the passionate 
defense of orthodox doctrine in the face 
of changing strategic realities. We are 
proceeding with SDI research because 
we see a positive and, indeed, revolu- 
tionary potential: defensive measures 
may become available that could render 
obsolete the threat of an offensive first 
strike. A new strategic equilibrium 
based on defensive technologies and 
sharply reduced offensive deployments is 
likely to be the most stable and secure 
arrangement of all. 

Our concept can be described as 
follows: during the next 10 years, the 
U.S. objective is a radical reduction in 
the power of existing and planned offen- 
sive nuclear arms, as well as the 
stabilization of the relationship between 
offensive and defensive nuclear arms, 
whether on earth or in space. We are 
even now looking forward to a period of 
transition to a more stable world, with 
greatly reduced levels of nuclear arms 
and an enhanced ability to deter war 
based upon an increasing contribution of 
non-nuclear defenses against offensive 
nuclear arms. This period of transition 
could lead to the eventual elimination of 
all nuclear arms, both offensive and de- 
fensive. A world free of nuclear arms is 
an ultimate objective to which we, the 
Soviet Union, and all other nations can 

The Growing Unity and Strength 
of Friends and Allies 

As the political dominance of the super- 
powers began to erode in the last few 
decades, some saw a five-power world 
emerging— with the United States, 
Soviet Union, Western Europe, China, 
and Japan as the major players. After 
the energy crisis of the early 1970s, 
others emphasized the increasing 
importance of the North-South relation- 
ship. The fact is, none of these concepts 
adequately describes the evolving pat- 
tern of world politics. In my view, the 
most striking trend is something else: 
the growing dynamism, cohesion, and 
cooperation of like-minded nations that 
share an important set of positive goals. 
Equilibrium is not enough. American 
foreign policy is driven by positive 
goals— peace, democracy, liberty, and 
human rights; racial justice; economic 

and social progress; the strengthening of 
cooperation and the rule of law. These 
are not Soviet goals. Yet they are at the 
core of any durable international 
system, because they are the goals that 
inspire peoples and nations around the 

The new spirit and unity of peoples 
that share these goals is a new trend we 
can see in many regions of the world 
and in many dimensions of foreign 

We see a new spirit of collaboration 
and frienship in our ties with our im- 
mediate neighbors, Canada and Mex- 
ico — ties whose importance is self- 
evident and which are a priority interest 
of the President. 

In the Atlantic community, our 
time is marked by a new degree of 
political harmony and intimate collabora- 
tion among the Western allies. Just as 
striking, Japan, too, has emerged as a 
partner on key political and security 
issues. There is a new awareness, for 
example, of the importance of 
strengthening conventional defenses, as 
a way of bolstering Europe's security 
while reducing NATO's reliance on 
nuclear weapons. A strong Western de- 
terrence posture is the most solid basis 
for engaging the East in constructive 
negotiations. Under Lord Carrington's 
wise leadership, NATO is taking steps 
for the short run to improve its 
readiness and infrastructure. For the 
longer run, the alliance is addressing 
other critical deficiencies, including the 
fundamental challenge of improving the 
efficiency of allied defense procurement. 

Amid all the changes in the world, 
the security and well-being of Western 
Europe continue to be a vital interest of 
the United States. We have always sup- 
ported West European unity, knowing 
that a strong Europe, while it would be 
a competitor in some ways, was in the 
overall interest of the free world. We 
wish the European Community well; we 
encourage our European friends to 
make further progress in developing a 
true European-wide market and in 
breaking down structural rigidities that 
impede both economic expansion and ef- 
fective economic cooperation with us. 

We see also, in Europe, new and 
creative thinking about the continuing 
pursuit of political unity and about 
strengthening West European coopera- 
tion in the defense field. We support 
both these goals. The West can only 
benefit from a major European role in 
world affairs. And the peoples of 
Western Europe should see defense as 
an endeavor they undertake for their 
own future, not as a favor to the United 

States. With statesmanship and a spirit 
of collaboration on both sides of the 
Atlantic, this evolution will strengthen 
the common defense and heighten the 
sense of common political purpose 
among the democracies. 

As we think about Europe's evolu- 
tion, we cannot forget Eastern Europe. 
Since the days of the Marshall Plan, 
when the West invited the East to join, 
we have always wanted the success of 
Western Europe to be a beacon to all of 
Europe. The present political division of 
the continent is wholly artificial; it exists 
only because it has been imposed by 
brute Soviet power; the United States 

A sense of Pacific com- 
munity is emerging. 

has never recognized it as legitimate or 
permanent. Behind this cruel barrier lie 
political repression and economic stagna- 
tion. In certain countries, there are ef- 
forts at liberalization. But all the 
peoples of Eastern Europe are capable 
of something better, deserve something 
better, and yearn for something better. 
We have witnessed in recent years the 
powerful aspiration for free trade 
unions, for economic reform, for political 
and religious freedom, for true peace 
and security, for human rights as prom- 
ised by the Helsinki accords. We hope to 
see the day when the Soviet Union 
learns to think anew of its own security 
in terms compatible with the freedom, 
security, and independence of its 

In East Asia and the Pacific, 
another new reality is changing our 
thinking about the world. The economic 
dynamism of this region is taking on in- 
creasing importance, not only as a factor 
in America's foreign trade but as an eco- 
nomic model for the developing world 
and as a unique and attractive vision of 
the future. We see the countries of free 
Asia growing at 7% a year over the past 
decade; for the past 5 years, our trade 
with East Asia and the Pacific has been 
greater than our trade with any other 
region and is expanding at an acceler- 
ating rate. ASEAN [Association of 
South East Asian Nations] has become 
one of the world's most impressive ex- 
amples of economic development and 
regional political cooperation. The 
Republic of Korea is a spectacular eco- 
nomic success story. Japan is playing a 

March 1985 



larger role— responsibly, positively, and 
cooperatively— commensurate with its 
growing strength. Experience is proving 
that economic openness is the formula 
for prosperity. 

Pragmatism is now the watchword 
in the People's Republic of China, where 
the hopes for economic modernization 
have been invested— wisely— in a bold 
program of reform. China's long march 
to market is a truly historic event— a 
great nation throwing off outmoded eco- 
nomic doctrines and liberating the 
energies of a billion talented people. We 
wish China well in this exciting 

more than restored its position in Asia. 
We can be proud of the vitality of our 
alliances, friendships, and productive 
ties in this promising region. If nations 
act with wisdom and statesmanship, we 
may well be at the threshold of a new 
era in international relations in the 
Pacific Basin. 

In Latin America, another kind of 
trend is apparent— the steady advance 
of democracy. Democracy is hardly a 
new idea, but this new development is 
revising some earlier assumptions in 
some quarters about the world's political 
future. A few years back, pessimists 
maintained that the industrial democ- 

After a long twilight of dictatorship, the trend 
toward free elections and popular sovereignty in 
this hemisphere is something to cheer about. 

There are, of course, problems that 
pose dangers to this bright economic 
future: the Soviet military buildup in the 
region; aggression by the Soviet Union 
and its clients in Afghanistan and Cam- 
bodia; unresolved tensions on the 
Korean Peninsula; internal problems in 
various countries. East Asia has a rich 
heritage of civilization— and also a tur- 
bulent history of bitter conflict. The 
tragedy that two of Asia's great ancient 
monuments— Angkor Wat and Boro- 
budur— have suffered damage from 
modern violence is both a paradox and a 

The United States is conscious of its 
responsibility to contribute, in its way, 
to security and stability in East Asia 
and the Pacific. Our diplomacy seeks 
peaceful solutions to Asia's problems so 
that the fullest potential of its promise 
can he realized. We welcome, in par- 
ticular, the role of ASEAN, including 
the front-line state of Thailand, which is 
working effectively to curb Vietnamese 
expansionism and aggression and to 
achieve a just settlement of the Cambo- 
dian conflict. 

Overall, we are enormously en- 
couraged by the new trend we see 

ird wider collaboration among many 
oris with an extraordinary 

■ ify of cultures, races, and political 
of Pacific community 
erging. 'I here i an expanding prac- 

of regional consultation and a 

e of common interest in 
regional security. In thi a decade 

■ r Vietnam, the United has 

racies were doomed to permanent 
minority status in the world community. 
Today, there is mounting evidence that 
the ideal of liberty is alive and well. In 
the Western Hemisphere, almost 95% of 
the population of Latin America and the 
Caribbean today live under governments 
that are either democratic or clearly on 
the road to democracy— in contrast to 
only one-third in 1979. Over the last 5 
years, popularly elected leaders have re- 
placed military rulers or dictators in 
Argentina, Bolivia, Ecuador, El 
Salvador, Honduras, Panama, Peru, and 
Grenada. Brazil and Uruguay will in- 
augurate new civilian presidents in 
March. Guatemala is in transition to 
democracy. After a long twilight of dic- 
tatorship, the trend toward free elec- 
tions and popular sovereignty in this 
hemisphere is something to cheer 

The United States has always been a 
champion of democracy. Democratic in- 
stitutions are the best guarantor of 
human rights and also the best long- 
term guarantor of stability. The Na- 
tional Endowment for Democracy, with 
bipartisan support, is one reflection of 
this American commitment. On every 
continent, we see a trend toward democ- 
racy or else a yearning for democracy; 
both are vivid demonstrations that the 
idea of liberty is far from a culture- 
hound aspiration or monopoly of the in- 
dustrialized West. 

In fact, after years of guerrilla in- 
surgencies led by communists against 

pro- Western governments, we now see 
dramatic and heartening examples of 
popular insurgencies against communist 
regimes. Today, in a variety of different 
circumstances— in Nicaragua, in 
Afghanistan, in Cambodia, in Ethiopia, 
and elsewhere in Africa— Marxist- 
Leninist rulers have found that the 
aspiration for representative govern- 
ment is not so easy to suppress. Ameri- 
cans have a long and honorable tradition 
of supporting the struggle of other 
peoples for freedom, democracy, inde- 
pendence, and liberation from tyranny. 
In the 19th century we supported Simon 
Bolivar, Polish patriots, and others seek- 
ing freedom— reciprocating, in a way, 
the aid given to us in our own revolution 
by other nations like France. 

As the President put it a week ago: 
"[W]e, who are committed to free 
government and democratic institutions, 
must maintain a sense of fraternity be- 
tween ourselves and other freedom- 
loving peoples." This is a proud heritage 
and a moral responsibility, and it poses 
some practical questions that we must 
face up to early in the 99th Congress. 

The future of democracy is precisely 
what is at stake in Central America. 
U.S. policy is to promote democracy, 
reform, and human rights; to support 
economic development; to help provide a 
security shield against those who seek to 
spread tyranny by force; and to support 
dialogue and negotiation both within and 
among the countries of the region. Act- 
ing directly and through Cuba, the 
Soviet Union is abetting the establish- 
ment of a new communist dictatorship in 

We are backing democratic govern- 
ments and democratic political forces 
throughout Central America against ex- 
tremists of both the left and the right. If 
we abandon those seeking democracy, 
the extremists will gain and the forces 
of moderation and decency will be the 
victims. This is why the Administration 
has worked so hard, and will continue to 
work hard, for effective negotiations, for 
economic and security assistance, and 
for the bipartisan plan that emerged 
from the Kissinger commission [National 
Bipartisan Commission on Central 
America]. If the forces of dictatorship 
continue to feel free to aid and abet in- 
surgencies in the name of "proletarian 
internationalism," it would be absurd if 
the democracies felt inhibited about pro- 
moting the cause of democracy, even by 
collective self-defense against such ac- 
tions. Our nation's vital interests and 
moral responsiblity require us to stand 
by our friends in their struggle for 


Department of State Bulletin 


The Dynamic of Change 

The process of change is inexorable. In 
southern Africa we have a role to play 
in working for democratic change in 
South Africa. We are also key to efforts 
to help create a climate of regional 
security that will enable and encourage 
countries to get on with the priority of 
building decent and prosperous societies. 
In short, U.S. policy must pursue the 
dual objectives of racial justice and 
regional security. These two goals are 
not in conflict; they reinforce each other. 
But achieving them requires responsible, 
prudent, and dedicated diplomacy. 

These twin challenges call for 
serious analysis and sober thinking, not 
emotional responses. We have already 
accomplished much, but our influence is 
not infinite. Today, there is less cross- 
border violence in southern Africa than 
at any time in more than a decade. 
Progress is being made toward a 
Namibia settlement. We have strength- 
ened ties with Mozambique and other 
regional states. And South Africa itself 
has developed cooperative relations with 
many of its neighbors. 

President Reagan has made clear 
that we regard South African apartheid 
as repugnant. He spoke loud and clear 
on December 10 when he said: 

We . . . call upon the Government of 
South Africa to reach out to its black majori- 
ty by ending the forced removal of blacks 
from their communities and the detention, 
without trial, and lengthy imprisonment of 
black leaders. . . . [W]e ask that the con- 
structive changes of recent years be broad- 
ened to address the aspirations of all South 
Africans. . . . We urge both the Government 
and the people of South Africa to move 
toward a more just society. 

Within South Africa, a dynamic of 
change is already at work: more positive 
change is occurring now than in the 
1970s or 1960s or 1950s. The positive in- 
fluence of our relationship— our diplo- 
macy, our companies, our assistance 
programs for black South Africans— is 
helping to build the basis for further 
change. Apartheid must go. But the only 
course consistent with American values 
is to engage ourselves as a force for con- 
structive, peaceful change while there is 
still a chance. It cannot be our choice to 
cheer on, from the sidelines, the forces 
of polarization that could erupt in a race 
war; it is not our job to exacerbate hard- 
ship, which could lead to the same 

Another region of change is the 
Middle East. Recent events have 
reminded us that the Arab-Israeli con- 
flict is far from the only source of ten- 
sion in that part of the world. There are 

other deep-seated national, ethnic, and 
religious conflicts like the Iran-Iraq war; 
there are diverse sources of radical ex- 
tremism ranging from Marxist-Leninist 
ideology, to Islamic fundamentalism, to 
Qadhafi's bizarre personal brand of 
fanaticism; the Soviets seek to reinforce 
rejectionist elements and to exploit 
regional tensions for their own ad- 

The United States will continue its 
efforts to promote peaceful solutions in 
this vital area. This mediation is, of 
course, a traditional American role, but 
new conditions always call for new ways 
of thinking about how to pursue it. We 
are committed to the support of diplo- 
matic efforts to end the conflicts in the 
gulf, in Lebanon, and in the Sahara. We 
are committed to the President's 
September 1 initiative as the most prom- 
ising route to a solution of the Pales- 
tinian problem. We will be intensively 
engaged this year in consultations with 
our Arab and Israeli friends to explore 
opportunities for progress. 

invest, to take risks, to be efficient. We 
have reduced government regulation, in- 
tervention, and control. We have opened 
opportunities for freer competition in 
transportation, finance, communication, 
manufacturing, and distribution. Last 
year's real growth in GNP [gross na- 
tional product] was the sharpest increase 
since 1951; inflation was the lowest 
since 1967. The overall result has been 
the extraordinary creation of over 7 
million new jobs in 2 years. 

Success inspires emulation. Not only 
in East Asia, as I noted, but on every 
continent— Europe, Latin America, 
Africa, and elsewhere in Asia— we see 
movement to decentralize, to deregulate, 
to denationalize, to reduce rigidity, and 
to enlarge the scope for individual pro- 
ducers and consumers to cooperate free- 
ly through markets. In Africa, for exam- 
ple, if there is to be a long-term solution 
to the problem of hunger, it will have to 
come not just from relief efforts but 
from training, productive investment, 
and liberalizing reforms in agriculture; 

Apartheid must go. But the only course consistent 
with American values is to engage ourselves as a 
force for constructive, peaceful change while there 
is still a chance. 

In the global economy, an impor- 
tant shift of another kind is taking 
place— an intellectual shift, reflecting 
some lessons from experience. Lord 
Keynes's point about practical men being 
in thrall to some defunct economist may 
be less true now than in the past. Or 
perhaps the views first expressed by 
Adam Smith over two centuries ago on 
the creation of the "wealth of nations" 
are once again gaining practical prom- 
inence. At any rate, reality is intruding 
on some long-held notions about eco- 
nomic policy. 

In both industrialized and developing 
countries, the economic difficulties of re- 
cent years are reminding us of some old 
truths about the real sources of eco- 
nomic progress. Some of us never forgot 
those truths. But recent experience has 
fueled a broad and long-overdue skep- 
ticism about statist solutions, central 
planning, and government direction. 

This intellectual shift is partly the 
product of the extraordinary vigor of 
the American recovery. The United 
States has revised its tax system to pro- 
vide real incentives to work, to save, to 

our aid policy is encouraging the efforts 
of African countries to move further in 
this direction. 

A worldwide revolution in economic 
thought and economic policy is under- 
way. And it is coming just in time, 
because it coincides with yet another 
revolution— a revolution in the tech- 
nological base cf the global economy. 
This is what Walter Wriston has called 
"the onrushing age of information tech- 
nology"— the combination of microchip 
computers, advanced telecommunica- 
tions, and continuing innovation that is 
transforming almost every aspect of 
human endeavor. 

The implications of this revolution 
are not only economic. First of all, the 
very existence of these technologies is 
yet another testimony to the crucial im- 
portance of entrepreneurship— and 
government policies that give free rein 
to entrepreneurship— as the wellspring 
of technological creativity and economic 
growth. The closed societies of the East 
are likely to fall far behind in these 

March 1985 



areas— and Western societies that main- 
tain too many restrictions on economic 
activity run the same risk. 

Second, any government that 
resorts to heavyhanded measures to con- 
trol or regulate or tax the flow of elec- 
tronic information will find itself stifling 
growth of the world economy as well as 
its own progress. This is one of the 
reasons why the United States is press- 
ing for a new round of trade negotia- 
tions in these service fields of data proc- 
essing and transfer of information. 

Third, the advance of technology in 
this dimension is bound to challenge 
many cherished notions of sovereignty. 
But here, too, the West has the advan- 
tage, because the free flow of informa- 
tion is inherently compatible with our 
political system and values. The com- 
munist states, in contrast, fear this in- 
formation revolution perhaps even more 
than they fear Western military 
strength. If knowledge is power, then 
the communications revolution threatens 
to undermine their most important 
monopoly— their effort to stifle their 
people's information, thought, and inde- 
pendence of judgment. We all remember 
the power of the Ayatollah's message 
disseminated on tape cassettes in Iran; 
what could have a more profound impact 
in the Soviet bloc than similar cassettes, 
outside radio broadcasting, direct broad- 
cast satellites, personal computers, or 
Xerox machines? 

Totalitarian societies face a dilem- 
ma: either they try to stifle these tech- 
nologies and thereby fall further behind 
in the new industrial revolution, or else 

rangements, legal commitments, and 
technological safeguards to control the 
proliferation of nuclear weapons 
capabilities. This program has, in fact, 
had considerable success, in that the 
number of states that have acquired the 
means to produce nuclear explosives is 
far lower than doomsayers predicted 20 
years ago. At the same time, the poten- 
tial dangers of nuclear weapons pro- 
liferation remain as serious and menac- 
ing to international stability as has long 
been predicted. 

The Reagan Administration will pur- 
sue this essential endeavor with a 
realistic appreciation of its complexities. 
Our thinking on this issue takes account 
of the growing international reliance on 
peaceful nuclear energy, the security 
concerns that give rise to the incentive 
to seek nuclear weapons, and the need 
for broad multilateral collaboration 
among nuclear suppliers if a nonprolifer- 
ation regime is to be effective. We have 
made progress in restoring a relation- 
ship of confidence and a reputation for 
reliability with our nuclear trading part- 
ners. We have had fruitful talks with the 
Soviet Union on this subject; we have 
worked to promote comprehensive safe- 
guards and stricter export controls. 

New Challenges to Our 
Ways of Thinking 

These broad trends I have described are 
mostly positive trends, but not all. We 
see social dislocation arising from eco- 
nomic change; we see urban alienation, 
political turbulence, and the many poten- 

. . . on every continent . . . we see movement to 
decentralize, to deregulate, to denationalize, to 
reduce rigidity, and to enlarge the scope for in- 
dividual producers and consumers to cooperate 
freely through markets. 

they permit these technologies and see 
their totalitarian control inevitably 
eroded. In fact, they do not have a 
choice, because they will never be able 
entirely to block the tide of technological 
advance however hard they try. 

The march of technology also com- 
pete us to continue our efforts to pre- 
sent the spread of nuclear weapons, 
fritted States has long been the 

■ r of an international effort to 

establi ih a regime of institutional ar- 

tial sources and forms of disorder I have 
mentioned. The changes in the interna- 
tional system will follow the positive 
trends only if we— the United States and 
the free world— meet our responsibility 
to defend our interests and seek to 
shape events in accordance with our 
own ideals and goals. 

In at least one respect, the modern 
world — with its spreading technology 
and prosperity and democratic aspira- 
tions — is ironically becoming also more 

and more vulnerable. I am thinking, of 
course, about terrorism. Even as the 
world becomes more secure from the 
danger of major war, paradoxically the 
democratic world now faces an increas- 
ing threat from this new form of war- 

Terrorism these days is becoming 
less an isolated phenomenon of local 
fanatics and increasingly part of a new 
international strategy resorted to by the 
enemies of freedom. It is a vicious 
weapon used deliberately against democ- 
racies; against the interests, policies, 
and friends of the democracies; and 
against completely innocent people. 
There are disturbing links, as well, to in- 
ternational drug trafficking. Terrorism 
is a problem that, more than many 
others, is forcing us into new ways of 
thinking about how to safeguard our 
future. During the year ahead we must 
be prepared for serious terrorist threats 
in Western Europe, in the Middle East, 
and in Latin America, much of it sup- 
ported by or encouraged by a handful of 
ruthless governments. 

As you know, I have been speaking 
out frequently on this subject, to stimu- 
late public consideration and discussion 
of the complex issues involved. A 
counterstrategy for combating ter- 
rorism, in my view, must encompass 
many things. 

• We and our allies must work still 
harder to improve security, share infor- 
mation, coordinate police efforts, and 
collaborate in other ways to defeat inter- 
national terrorism. Much has been done 
in the past year, but much more remains 
to be done. 

• We in this country must think 
hard about the moral stakes involved. If 
we truly believe in our democratic values 
and our way of life, we must be willing 
to defend them. Passive measures are 
unlikely to suffice; means of more active 
defense and deterrence must be con- 
sidered and given the necessary political 

• Finally, while working tirelessly to 
deny terrorists their opportunities and 
their means, we can — and must — be ab- 
solutely firm in denying them their 
goals. They seek to blackmail us into 
changing our foreign policies or to drive 
us out of countries and regions where 
we have important interests. This we 
cannot permit; we cannot yield position 
or abandon friends or responsibilities 
under this kind of pressure. If we allow 
terrorists even one such victory, we em- 
bolden them further; we demoralize all 
who rely on us, and we make the world 
an even more dangerous place. 


Department of State Bulletin 


There is, of course, a broader issue 
here, which I have also been discussing 
in several public statements. This is the 
basic question of the use of American 
power in the defense of our interests 
and the relevance of our power as the 
backstop to our diplomacy. It is re- 
flected, for example, in what are often 
called "gray-area challenges" — namely, 
the kind of regional or local conflicts and 
crises that are likely to persist in a tur- 
bulent world, below the threshold of ma- 
jor war but nonetheless affecting 
important Western interests. Most of 
the major conflicts since 1945, indeed, 
have originated in such conflicts in the 
developing world. The end of the co- 
lonial order has not brought universal 
peace and justice; much of the develop- 
ing world is torn by the continuing 
struggle between the forces of modera- 
tion and the forces of radicalism — a 
struggle actively exploited and exacer- 
bated by the Soviet Union. 

It is absurd to think that America 
can walk away from such challenges. 
This is a world of great potential in- 
stability and many potential dangers. 
We live, as is commonly said, on a 
shrinking planet and in a world of in- 
creasing interdependence. We have an 
important stake in the health of the 
world economy and in the overall condi- 
tions of global security; the freedom and 
safety of our fellow human beings will 
always impinge on our moral conscious- 
ness. Not all these challenges threaten 
vital interests, but at the same time an 
accumulation of successful challenges 
can add up to a major adverse change in 
the geopolitical balance. 

We must be wise and prudent in 
deciding how and where to use our 
power. Economic and security assistance 
to allies and friends is clearly the pre- 
ferred course — and is of crucial impor- 
tance to our foreign policy; the direct 
American use of force must always be a 
last resort. The United States will 
always seek political solutions to prob- 
lems, but such solutions will never suc- 
ceed unless aggression is resisted and 
diplomacy is backed by strength. We are 
reasonably well prepared to deter all-out 
Soviet nuclear aggression — provided we 
continue with our strategic moderniza- 
tion — but we must be sure we are as 
well prepared, physically and psychologi- 
cally, for this intermediate range of 

Peace, Progress, and Freedom 

I have touched on a wide variety of 
topics, but two very important, and very 
basic, conclusions can be drawn from 

First, the agenda for the immediate 
future seems to me to be an agenda on 
which the American people are essential- 
ly united. These are goals that are wide- 
ly shared and tasks that are likely to re- 
inforce another important trend: name- 
ly, the reemergence of a national con- 
sensus on the main elements of our 
foreign policy. This, indeed, may be the 
most important positive trend of all, 
because so many of our difficulties in re- 
cent decades have been very much the 
product of our own domestic divisions. I 
hope that our two parties and our two 
branches of government will find ways 
to cooperate in this spirit, which would 
enormously strengthen our country in 
the face of the new opportunities and 
challenges I have described. 

Second, all the diverse topics I have 
touched upon are, in the end, closely in- 
terrelated. President Reagan made this 
point in his speech to the United Nations 
last September. The United States seeks 
peace and security; we seek economic 

cratic principles. In any case, we now 
define our strategic interests in terms 
that embrace the safety and well-being 
of the democratic world. 

Similarly, as I have already dis- 
cussed, it is more and more understood 
that economic progress is related to a 
political environment of openness and 
freedom. It used to be thought in some 
quarters that socialism was the appro- 
priate model for developing countries be- 
cause central planning was better able 
to mobilize and allocate resources in con- 
ditions of scarcity. The historical ex- 
perience of Western Europe and North 
America, which industrialized in an era 
of limited government, was not thought 
to be relevant. 

Yet the more recent experience of 
the Third World shows that a dominant 
government role in developing econo- 
mies has done more to stifle the natural 
forces of production and productivity 
and to distort the efficient allocation of 
resources. The real engine of growth, in 

During the year ahead we must be prepared for 
serious terrorist threats in Western Europe, in the 
Middle East, and in Latin America, most of it sup- 
ported by or encouraged by a handful of ruthless 

progress; we seek to promote freedom, 
democracy, and human rights. The con- 
ventional way of thinking is to treat 
these as discrete categories of activity. 
In fact, as we have seen, it is now more 
and more widely recognized that there is 
a truly profound connection among 
them. And this has important implica- 
tions for the future. 

It is no accident, for example, tha